Written by Kellie Steed Reviewed by Lee Trett
Sources
6 January 2026
Full rewrite to bring article up to date
20 April 2020
First Published
Using gifted deposits for mortgages has become incredibly common over the past decade. While there have been reductions, mortgage rates are more than they were for the previous generation of first-time buyers, and house prices are significantly higher, pushing up deposit requirements.
Sourcing a large enough deposit is the most common issue among prospective home owners, often delaying their home ownership journey by years. For those lucky enough to be gifted a deposit, buying a home is typically much quicker and easier. We look at the rules around receiving gifted deposits, who can provide them, and which lenders are happiest to accept them.
Can you get a mortgage with a gifted deposit?
Yes you can. For many first-time buyers, a gifted deposit mortgage is the easiest way to get onto the property ladder. However, while most lenders accept some form of gifted deposit, they each have their own rules regarding who can gift a mortgage deposit to you.
Typically those providing the deposit can give as much or as little as they want to, although lenders usually require between 5-10% of the property value. The good news is, many lenders will accept a deposit that is a combination of a gift and savings. This means that if you have some deposit, but not enough, someone can top up the amount for you.
What are the rules around this?
Those lenders that accept them typically have the same rules about gifted deposits, which are:
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The gift must not be a loan. They will need to confirm that they are not expecting any form of repayment and that they do not have any legal interest or claim over your property. A signed declaration must be provided by the donor to this effect
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The person providing the gift will need to provide proof of ID, address and bank statements, as well as proof of the source of the gift to solicitors who will carry out Anti-Money Laundering (AML) Checks
The one area where lenders tend to differ is with regards to the gift provider. Some lenders can have fairly strict restrictions on who can gift you the money, only allowing close family members such as parents and grandparents to gift you a deposit. Others can be a bit more flexible, allowing more distant relatives, partners, friends, or even business partners/colleagues to help you.
Gifts from Parents and close family
All lenders that accept gifted deposits allow parents (including step-parents and adoptive parents) to provide them, and many also allow other close family members, including grandparents and siblings, although this can vary by lender
Extended family
Fewer lenders tend to accept gifted deposits from more distant family members, such as aunties, uncles, cousins, nieces, nephews and children (including step-children and adopted children). However, there are certainly lenders who will, it’s just a case of approaching the right one for your circumstances.
Partner
Some lenders accept gifted deposits from romantic partners, whether you’re buying alone or together, however, there are fewer available that will, and they are likely to be cautious with this type of arrangement. If you are buying jointly with a partner and only one partner is providing the deposit, this may be considered a gifted deposit.
Non-relatives
There are a few lenders with greater flexibility that allow friends, colleagues and business partners to provide a gifted deposit. However, this is fairly niche, and you’ll likely need a more specialist lender to achieve this
Vendor gifted deposit mortgages
Mortgage vendor gifted deposits are usually provided by building companies when you buy one of their new homes. However, rather than providing you with a cash lump sum, they reduce the cost of the property, usually by a set percentage. This amount will be counted as or towards a deposit by the mortgage lender. Basically they are gifting you equity in the property, which is what the initial deposit would be used for had you saved up anyway.
How to get a mortgage with a gifted deposit
If you’re planning to buy a home with a gifted deposit, follow these simple steps:
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First of all, it’s important to search for a lender who accepts gifted deposits from the type of recipient you are receiving it from. We can help you with this by searching the whole market for you, be sure to mention this early on so that we can match you with the right lender
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Have your paperwork ready, you’ll need to provide information about the gifter, their relationship to you, and the source of the deposit
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Ensure you have a letter from the person gifting you the deposit declaring that it’s a genuine gift
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Choose the deal that suits you. Once you have provided all of the above, the mortgage application process will be the same as it is for any other applicant - you may even qualify for a better rate if the gifted deposit has substantially lowered your Loan to Value (LTV)
Get mortgage advice about your deposit options
Which lenders accept gifted deposits?
Most, but not all lenders accept gifted deposits from immediate family. However, which family members are considered immediate family can vary by lender. Typically they all consider parents, grandparents and siblings to be ‘immediate’ however, some lenders will also consider aunties, uncles and children, whereas others won’t. If you’re gifted a deposit from someone who is not an immediate family member, it’s a good idea to check which lender accepts that type of donor. Below are some examples of where lenders may accept a gifted deposit from, however, keep in mind that criteria may change at any time:
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Santander: Allow immediate family members, such as parents, grandparents, and siblings to provide gifted deposits
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Halifax: Only allow gifted deposits from immediate family members
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Nationwide: Accept gifts from anyone provided it is unconditional and the donor has no interest in the property
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Natwest: Allow all relatives and will consider 3rd parties, such as friends, with a confirmation of gift letter
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Virgin Money: Accept gifted deposits from family and property vendors (for new builds only)
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Skipton Building Society: Have very flexible policy, gifted deposits can be considered from family, friends and even landlords in some specific cases
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Accord: Accept blood or law relatives only
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Vida Home Loans: Will only consider ‘close relatives’ which they consider to be parents (including step parents and adoptive parents), siblings, grandparents, aunties and uncles, cousins, children and nieces and nephews
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Melton Building Society: Accept gifted deposits from non-parents to include extended family, friends and other 3rd parties, but only up to 50% of the property value
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The Cambridge Building Society: Will consider all blood and law relatives, as well as spouses and civil partners
Getting a buy-to-let mortgage with a gifted deposit
It’s possible to use a gifted deposit to purchase a buy-to-let property with most lenders, no matter whether you’re receiving the money from family or non-family members. However, those lenders who do allow this type of arrangement tend to be much more cautious with criteria and checks, especially when it comes to limited company buy to let mortgages.
You’ll need to prove that the gift is intended for one of the directors or shareholders, and that the vendor will not try to make any later claims to the business. The AML checks will also be much stricter on a company than an individual, as the source of the funds is often more difficult to prove, especially if coming from overseas.
Why choose Money Helpdesk for your mortgage needs?
If you’re looking for a lender that will be happy to accept a gifted deposit, whether it’s from your parents, great step-uncle, or even a business colleague, we can search the whole market to find the lender most accommodating to your needs. We can provide expert gifted mortgage deposit advice, as well as helping out with any other mortgage related queries you may have.
Simply get started to speak to one of our brokers who specialises in gifted deposit mortgages.
FAQs
There are generally no financial limits on the minimum or maximum amount that can be gifted towards a mortgage deposit, so long as the person providing the money has signed a declaration to confirm it’s a gift and anti-money laundering checks are passed. However, some lenders may put a cap on the maximum percentage of the property value that a gifted deposit can pay for, for example 50%.
Some lenders provided gifted deposit letter forms or templates of their own to complete, however, if writing from scratch, they should contain the following information:
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Your name
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The name of the person gifting the money
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Your relationship to the person giving the gift
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The amount of the gift
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The source of the money and evidence that the gift giver can afford this amount
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Signed confirmation that the person is not expecting to be repaid or to receive any equity in the property
There is no immediate income tax due for the person receiving the gift. However, the
gifter has an annual tax-free gift allowance of £3,000. If the total gifted amount is higher than £3000, it is considered a Potentially Exempt Transfer (PET). This means that if the donor dies within seven years of giving the gift, their estate may have to pay inheritance tax on it.
The gift giver can also not be ‘depriving themselves of capital’ by providing the deposit amount. For example, if giving the gift leaves them reliant on any form of state benefit, there may be significant tax complications.
Often offered by property companies when you buy a new build home, this form of deposit is provided as a discount on the cost of the home. However, it’s also possible for other sellers (usually family) to knowingly sell you a property at below market value, with the difference in price being treated as a gifted deposit. This can be more complicated, so it’s important to speak to a broker if you plan to utilise this option.
Some lenders allow gifted deposits for this type of mortgage, although it typically works a little differently. When it comes to building your own home, the gift will typically be a plot of land, rather than a cash sum.
A builder gifted deposit is where a developer offers to sell you a property at a discounted price. For example, if the property is valued at £200,000, and they offer to sell it to you for £175,000, the £25,000 variance can act as a deposit. This is often seen with new builds, where the developer uses this system to nudge buyers to complete the sale quickly.
New builds are generally seen as a higher risk for the lender as they have no history on the property. They may place a limit on the LTV (loan-to-value ratio) that they are willing to lend, and ask that the borrower invests some of their own money on top of the gifted deposit.