Gifted Deposit Mortgage: How a Gifted Deposit Can Help You Secure the Home You Want
Saving for a mortgage deposit is one of the biggest barriers to buying a home — especially for first-time buyers. With rising living costs and rent taking up a large share of income, many buyers worry they’ll be stuck saving for years.
This is where a gifted deposit mortgage can make a real difference. With help from family, many buyers are able to secure a home far sooner than they expected.
At Mortgage Bridge, we regularly help clients use gifted deposits successfully — including those with low savings, bad credit, or complex income. This guide explains how gifted deposit mortgages work, what lenders look for, and how family support can strengthen your application.
What Is a Gifted Deposit Mortgage?
A gifted deposit mortgage is a mortgage where some or all of the deposit is provided as a gift, usually by a family member.
Key points lenders care about:
- The money is a genuine gift
- It does not need to be repaid
- The gift giver will not have a legal interest in the property
As long as these conditions are met, most lenders are comfortable with gifted deposits.
Who Can Gift a Mortgage Deposit?
Most lenders accept gifted deposits from close family members, such as:
- Parents
- Grandparents
- Siblings
- Other immediate relatives
Some lenders may accept gifts from extended family, but gifts from friends are less commonly accepted and require careful lender selection.
Choosing the right lender is crucial when the gift source isn’t straightforward.
Can First-Time Buyers Use a Gifted Deposit?
Yes — gifted deposits are extremely common for first-time buyers.
In fact, many lenders expect family help to be involved, particularly where:
- Rent has made saving difficult
- Buyers are purchasing on one income
- Property prices are higher
A gifted deposit can be the difference between waiting years and buying now.
How Does a Gifted Deposit Help Mortgage Approval?
A gifted deposit can improve your mortgage application in several ways.
It Helps You Reach Minimum Deposit Levels
Many buyers struggle to reach the minimum deposit threshold. A gift can bridge the gap and make an application possible sooner.
It Can Improve Mortgage Rates
A larger deposit often leads to:
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- Lower interest rates
- More lender choice
- Better mortgage terms
Even a partial gift can have a meaningful impact.
It Can Offset Other Challenges
A gifted deposit can help where:
- Income is modest
- Credit history is imperfect
- Affordability is tight
Deposit strength often balances risk in the lender’s eyes.
Do You Need to Declare a Gifted Deposit?
Yes — always.
Lenders require:
- A gifted deposit letter
- Confirmation the funds are non-repayable
- Evidence of where the money came from
Failing to declare a gifted deposit can lead to serious problems later in the process.
What Is a Gifted Deposit Letter?
A gifted deposit letter is a signed document from the person gifting the money confirming:
- The amount being gifted
- That it is a gift, not a loan
- That they will not live in or own the property
Most lenders provide a template, and your broker will guide you through this step.
Does a Gifted Deposit Affect Stamp Duty or Ownership?
A gifted deposit:
- Does not give the giver ownership rights
- Does not make them liable for the mortgage
- Does not automatically affect tax position
However, independent legal advice is sometimes recommended for the person gifting the money, especially for larger amounts.
Can You Get a Gifted Deposit Mortgage with Bad Credit?
Yes — in many cases.
If you’ve had:
- Missed payments
- Defaults
- CCJs
A gifted deposit can:
- Increase lender confidence
- Open up specialist lender options
- Improve approval chances
We regularly help clients with adverse credit secure mortgages using family-gifted deposits.
How Much Deposit Can Be Gifted?
There’s usually no fixed limit.
A gifted deposit can cover:
- Part of the deposit
- The full deposit
Lenders care more about transparency and source of funds than the size of the gift.
Common Myths About Gifted Deposit Mortgages
“Gifted deposits aren’t allowed.”
False — most lenders accept them.
“The money must come from savings.”
Not always — but the source must be explainable.
“Family members become responsible for the mortgage.”
Incorrect — the borrower remains fully responsible.
What Are the Risks of Using a Gifted Deposit?
The main risks are practical, not lender-related:
- Family expectations not being clear
- Undeclared repayment arrangements
- Poor documentation
Clear communication and proper advice prevent problems later.
How to Prepare for a Gifted Deposit Mortgage
Before applying:
- Confirm the gift is non-repayable
- Ensure funds are transferred clearly
- Gather source-of-funds evidence
- Speak to a mortgage specialist early
Good preparation avoids delays and declined applications.
How Mortgage Bridge Helps with Gifted Deposit Mortgages
Gifted deposits are common — but they must be handled correctly.
At Mortgage Bridge, we:
- Confirm which lenders accept your gift source
- Guide families through documentation
- Support buyers with low savings or bad credit
- Structure applications to reduce delays and risk
We’re here to help you turn family support into a successful home purchase.
Key Takeaways
- Gifted deposit mortgages are widely accepted
- The gift must be declared and non-repayable
- Family help can improve approval chances and rates
- Deposit strength can offset income or credit challenges
- Correct lender choice is essential
Summary
A gifted deposit mortgage can be a powerful way to secure the home you want sooner, especially if saving alone feels out of reach. With the right structure, transparency, and lender choice, family support is widely accepted and often welcomed by mortgage providers.
Whether you’re a first-time buyer, buying on one income, or dealing with credit challenges, a gifted deposit can significantly improve your options. Understanding lender requirements and getting expert guidance ensures the process runs smoothly from start to finish.
This guide provides general information only, personalised recommendations must come from a regulated mortgage advisor
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Important information: Mortgage Bridge provides information only and acts as a mortgage introducer. We do not provide mortgage advice or make lender recommendations. We can introduce you to an FCA-regulated mortgage adviser who can provide personalised mortgage advice.