Getting a Mortgage with a Gifted Deposit from Family
For many first-time buyers, saving for a deposit is the hardest part of buying a home. With house prices and living costs on the rise, it’s no surprise that more people are turning to family for a little help — often in the form of a gifted deposit.
If you’re planning to use money from parents or relatives towards your house purchase, you’re definitely not alone. In fact, family support now helps fund around half of first-time buyer deposits in some parts of the country.
At Mortgage Bridge, we work with buyers and families every day who want to do this the right way — keeping things simple, transparent, and lender-friendly.
In this guide, we’ll explain exactly how gifted deposits work, what lenders expect, and how to make your mortgage application smooth and successful.
What Is a Gifted Deposit?
A gifted deposit is money given to you by a family member to use as (or towards) your house deposit.
The key word here is gifted — meaning it’s not a loan and doesn’t need to be paid back. Lenders require this confirmation because they need to know that no one else has a financial claim on your home.
So, if your parents, grandparents, or another close relative want to help you buy a home, they can gift part or all of your deposit — as long as it’s properly documented.
Who Can Gift a Deposit for a Mortgage?
Most lenders allow gifts from immediate family members, such as:
- Parents (including step-parents or legal guardians)
- Grandparents
- Siblings
- Children
Some lenders also accept gifts from extended relatives — aunts, uncles, or cousins — and in certain cases, even from close family friends if they can prove a genuine, long-term relationship.
However, not all lenders are equally flexible. That’s where we come in — we’ll match your situation to the right lender who’s comfortable with your deposit source.
Can You Get a Mortgage If the Deposit Is a Gift?
Yes, absolutely — gifted deposits are a common and accepted part of the mortgage process.
Lenders just need to make sure the money genuinely belongs to your family member and that it’s a true gift, not a loan.
They’ll usually ask for:
- A gifted deposit letter confirming the funds are a gift
- Proof of the donor’s ID (e.g. passport or driving licence)
- Bank statements showing where the funds came from
Once this is confirmed, the gifted deposit is treated the same as if it were your own savings.
How Much Can Be Gifted for a Deposit?
There’s no official limit to how much can be gifted — it can cover all or part of your deposit.
For example:
- You could save £10,000 and receive £15,000 as a gift for a £25,000 total deposit.
- Or your parents could gift the full 10% or 20% deposit on your new home.
As long as the lender is happy with the source and the funds meet anti-money-laundering (AML) checks, the amount doesn’t matter.
What Is a Gifted Deposit Letter and What Should It Say?
The gifted deposit letter is a simple but essential document that proves the money is a gift and not a loan.
Every lender has slightly different requirements, but it usually needs to include:
- The donor’s name, address, and relationship to the buyer
- The exact amount gifted
- A statement confirming it’s a gift with no repayment required
- A confirmation that the donor has no ownership or interest in the property
- The donor’s signature and date
We’ll provide you with a clear template that meets lender standards so everything goes through smoothly.
Do You Have to Pay Tax on a Gifted Deposit?
Usually, no immediate tax is due when gifting money for a deposit.
However, there are some inheritance tax (IHT) rules to be aware of:
- Everyone has a £3,000 annual gift allowance that’s immediately exempt from IHT.
- Gifts above that amount are known as “potentially exempt transfers.”
- If the person giving the gift passes away within seven years, the amount could be subject to IHT depending on their total estate value.
For most families, this isn’t an issue, but it’s good to understand the basics. If large sums are being gifted, we recommend speaking to a financial adviser or tax specialist for peace of mind.
What If the Deposit Is a Loan from Family?
If the money is intended to be repaid, then it’s not a gift — it’s a loan.
Some lenders accept family loans, but most prefer gifts because loans can affect affordability and create potential legal complications.
If it is a loan, the lender will want to know:
- The repayment terms (if any)
- Whether it will be secured on the property
In some cases, the lender may reduce the mortgage amount or even decline the application if the repayment terms create additional financial risk.
That’s why it’s nearly always better (and easier) for family support to be structured as a gift, not a loan.
Can Parents Gift a Deposit Using Equity from Their Own Home?
Yes — many parents release funds from their own property to help their children buy.
They can do this through:
- Remortgaging to raise cash from home equity
- Taking a lifetime mortgage or equity release (for older homeowners)
- Using savings or investments
This approach is common because it allows parents to help without depleting their day-to-day savings.
If you’re considering this route, we can advise on how to structure it safely so that it doesn’t affect the parent’s financial stability or tax position.
Can You Use a Gifted Deposit for a Buy-to-Let Property?
Yes — but it’s a bit more restricted.
While some lenders are happy with gifted deposits on buy-to-let mortgages, others prefer the funds to come from your own savings or equity.
If you’re planning to use a gifted deposit to invest in property, we’ll identify lenders who are comfortable with that structure.
Just keep in mind that lenders will still need the same documentation and will verify the gift’s source for AML purposes.
What Proof Do Lenders Need for a Gifted Deposit?
Lenders and solicitors must comply with anti-money-laundering regulations, so they’ll ask for:
- Bank statements from the person giving the gift (to show the funds are legitimate).
- Bank statements from you (to confirm you’ve received the funds).
- A gifted deposit letter, signed and dated.
- ID verification for the donor (passport, driving licence, etc.).
They may also ask where the donor originally got the money (e.g. savings, sale of a property, inheritance, or pension).
Having everything ready early makes the process much smoother. We’ll help you gather and present all documents clearly so lenders and solicitors are satisfied.
Do All Lenders Accept Gifted Deposits?
The majority of lenders do, but each one has its own criteria about:
- Who can gift (some require close family only)
- How much can be gifted
- Whether the donor must live in the UK
- What evidence they need
Some specialist lenders are more flexible than high-street banks, especially if the gift comes from extended family or a family friend.
At Mortgage Bridge, we’ll match your situation to lenders that fully accept your deposit setup — saving time and stress later.
Can I Combine a Gifted Deposit with My Own Savings?
Yes — and it’s actually very common.
You might have saved part of your deposit and received the rest as a gift. That’s absolutely fine; lenders are happy with mixed sources as long as everything is clearly documented.
For example:
- £10,000 saved yourself
- £15,000 gifted from parents
- £25,000 total deposit
We’ll simply help you declare both parts correctly in your application.
What If Multiple Family Members Want to Gift?
That’s fine too — multiple people can contribute to your deposit, as long as each provides a separate gift letter and proof of funds.
For instance, both parents and grandparents might each gift a portion. Lenders just need clear records for every contributor.
This kind of support can make a big difference, especially if you’re trying to increase your deposit size for better mortgage rates.
What Are the Benefits of Using a Gifted Deposit?
There are several key advantages to using a gifted deposit:
✅ Boosts your buying power – You may afford a better property or borrow less.
✅ Improves your interest rate – A bigger deposit often means cheaper mortgage deals.
✅ Avoids debt – No need for a loan or credit that affects affordability.
✅ Shows lender confidence – Family support demonstrates stability.
✅ Keeps ownership simple – The gift doesn’t create legal ties to the property.
It’s one of the most effective ways to bridge the gap between what you can save and what you need to buy your first home.
What Are the Risks or Considerations?
While gifted deposits are straightforward, there are a few things to keep in mind:
- The gift must be documented clearly — never assume verbal confirmation is enough.
- Some lenders may refuse gifts from overseas donors due to verification limits.
- If the money is transferred late, it can delay your purchase, so plan ahead.
- If the donor later expects repayment, it could create legal or financial complications.
The best approach is to be open, organised, and proactive from the start — we’ll guide both you and your family through every step to avoid issues later.
How Mortgage Bridge Helps with Gifted Deposits
We know that family gifts can feel both generous and emotional — it’s a big step for everyone involved. Our role is to make it clear, compliant, and stress-free.
At Mortgage Bridge, we’ll:
✅ Confirm whether your lender accepts gifted deposits (and from whom).
✅ Provide a clear gifted deposit letter template that meets all requirements.
✅ Help gather the proof of funds and ID documentation.
✅ Communicate directly with the lender and solicitor to ensure everything aligns.
✅ Keep everyone informed — from you to your family member — so there are no surprises.
Our goal is to make the process as smooth and reassuring as possible for both sides.
Final Thoughts: Family Support Can Make Homeownership Possible
A gifted deposit can be a powerful helping hand — especially for first-time buyers trying to take that first step.
As long as it’s properly documented and structured, lenders are happy to accept it, and the process can be straightforward.
At Mortgage Bridge, we specialise in helping buyers use family gifts effectively — making sure all the paperwork, lender requirements, and legal details are handled properly.
If you’re planning to use a gifted deposit (or are thinking of gifting one), we’d love to help you through the process. Let’s talk about your plans and make sure everything’s set up the right way from day one.