Gifted deposit mortgage guide for first-time buyers

A gifted deposit can make buying your first home more achievable when a family member (or sometimes a close friend) contributes money towards your deposit.

But a gifted deposit isn’t “no paperwork”. Lenders and solicitors usually need to understand that the funds are genuinely a gift, that there’s no expectation of repayment, and that the money movement can be evidenced.

This guide explains what typically matters in the process and how to plan the gift so it’s easier to evidence from start to finish. A deposit gift is one form of support, not a type of joint mortgage: the donor does not become a borrower simply by giving money.

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Gifted Deposit Mortgages

What a gifted deposit mortgage is

A gifted deposit is money given to you to put towards the deposit on a property purchase.

From a lender’s perspective, the key points are usually:

the money is a gift, not a loan
there is no obligation for you to repay the donor
the donor has the means to make the gift
the source and movement of funds can be evidenced

If the lender believes the money is repayable (even indirectly), it may be treated differently and can affect how your application is assessed.

Why gifted deposits create extra checks

Gifted deposits are part of the mortgage application and are subject to UK anti-money laundering requirements. In practice, this means lenders and solicitors must be able to follow the money trail and understand where the funds came from.

This is less about “investigating” you and more about being able to verify:

that the deposit is genuinely gifted
where the funds originated
that the paperwork matches what’s shown on the relevant bank statements

Every time money moves between accounts, it can create an additional step that needs to be explained. The more complex the movement, the more likely it is that extra questions or documentation will be requested.

How money movement can affect your application

Many first-time buyers save across more than one account, or move money to where it earns interest. With a gifted deposit, those normal habits can create extra administration.

Common issues that can slow things down include:

the gift is transferred through multiple accounts before it reaches the account used for the purchase
statements are missing key transactions or don’t show enough detail
dates and amounts don’t align neatly across documents
funds are consolidated too early, making it harder to trace the original source

Even when everything is legitimate, lenders and solicitors still need a coherent, verifiable story.

A helpful way to think about evidence is that transactions generally need to be supported by information showing:

where the money came from (the donor’s funds)
where it went next (the account it was credited into)

If the gift passes through several accounts, it may require additional statements or explanations to cover each step.

What donors are usually asked to provide

Requirements vary by lender and case, but donors are commonly expected to provide a declaration and supporting evidence.

Typical elements include:

a signed declaration confirming the money is a gift
confirmation there is no expectation of repayment
evidence of the donor’s ability to make the gift (often supported by bank statements)
identification and proof of address for the donor (where required)

If the donor has moved money around before gifting it, they may also need to explain that movement and provide supporting documentation.

The gifted deposit letter: what it usually covers

While lenders may have their own forms, a gifted deposit letter typically includes:

the name and address of the donor
the name and address of the recipient
the relationship between them
the amount being gifted and the date
where the funds came from (e.g. savings)
acknowledgement that the donor does not expect to be repaid
acknowledgement that the donor does not expect to gain any stake in the property

Some lenders also expect confirmation that the donor understands their funds are being used towards the purchase and that the recipient remains responsible for the mortgage.

Who can gift a deposit?

Gifted deposits commonly come from close family members such as parents or grandparents. In practice, lenders may also consider gifts from siblings, other relatives, or close friends, though the level of scrutiny can vary.

A useful way to think about it is: the closer the relationship and the clearer the evidence, the easier it tends to be to evidence the gift.

Gifter	How it’s usually viewed	Notes lenders may look for
Parents	Common and often straightforward	Clear bank transfer evidence and a signed gift declaration
Grandparents	Often accepted	Evidence of funds and a clear gift letter
Siblings	Possible	Documentation must clearly show it’s a gift, not a loan
Extended family	Sometimes accepted	May require extra explanation and stronger evidence
Close friends	Sometimes considered	Lenders often expect a detailed paper trail and clear relationship context
Non-family members	More limited	Often the most heavily scrutinised

Planning the gift to reduce delays

The simplest way to keep the process smooth is to plan the transfer so the audit trail is clear.

Practical planning points include:

avoid repeatedly moving the deposit money once you know you’ll be using it for the purchase
keep gifted funds separate from other money where possible, so it’s easier to evidence
avoid consolidating multiple sources too early if it will make tracing harder
time transfers carefully so the money reaches the relevant account with a clear paper trail

In many cases, transferring the gift closer to completion can help keep the evidence straightforward, provided it aligns with the lender and solicitor’s requirements.

If the gift comes from more than one person

Some first-time buyers receive contributions from multiple family members. This can work well, but it usually increases the amount of documentation because each donor’s funds may need to be evidenced.

To keep things manageable:

ensure each donor understands they may need to provide their own gift declaration
keep records of who gave what amount and when
avoid mixing multiple donors’ funds into one pot until you’re confident you can evidence the full path of the money

If your deposit includes both savings and gifted funds

It’s common for your deposit to be a combination of:

your own savings
gifted funds

The same audit trail principles apply. Lenders and solicitors typically need to distinguish what is yours and what is gifted, and to see that the funds have been held and transferred in a way that can be evidenced.

If you’ve moved money between accounts, it doesn’t automatically mean there’s a problem, but it can increase the likelihood of extra questions.

Common documentation pitfalls to avoid

While every case differs, delays often come from avoidable issues such as:

statements that don’t cover the required period
statements that are unclear or missing transaction detail
large credits that aren’t explained
donor reluctance to provide evidence once the process begins
last-minute changes to where the gift is held or how it’s transferred

A straightforward approach is to agree the plan early: who is gifting, how much, from which account, and when the transfer will happen.

Legal and tax considerations (overview)

Gifted deposits can have tax implications for the donor depending on the size and timing of gifts.

In broad terms, gifts may be relevant to inheritance tax considerations if the donor dies within a certain period after making the gift, and there may be reporting requirements in some circumstances. There can also be rules around annual allowances.

Because tax treatment can depend on individual circumstances, it’s usually sensible to consider professional tax guidance for the donor if the gift is substantial.

Alternatives to a gifted deposit

If family help isn’t available, or if you want to reduce reliance on a deposit gift, there are other ways buyers sometimes improve their mortgage position.

Alternative	How it works	Key considerations
Guarantor mortgage	Another person provides security so the lender can take less risk	The guarantor may be liable for repayments if you can’t pay
Shared ownership	You buy a share of a property and pay rent on the remainder	Leasehold arrangements, rent and potential service charges
Lifetime ISA (LISA)	A savings account with a government bonus for a first home	Rules and withdrawal conditions apply
Family offset mortgage	Family savings are linked to the mortgage to reduce interest	Savings may be tied up and may not earn interest in the usual way
Joint mortgage	Two borrowers apply together	Both borrowers are responsible for repayments
First Homes scheme (England)	Discounted new-build homes for eligible buyers	Eligibility and availability depend on the scheme and property

Frequently asked questions

There isn’t a single universal legal limit. Lenders consider the overall application, including income, property value, and risk. Very large gifts may require additional scrutiny.

Yes. If you receive money as a gift for your deposit, it should be declared to your lender as part of the mortgage application. Lenders typically require confirmation that the funds are a gift and not a loan.

It can. A gifted deposit increases your deposit contribution, which may improve your LTV position and support the lender’s assessment of risk, provided it’s properly evidenced.

The gifted deposit itself isn’t usually a credit factor. However, how the gift is documented and whether it is correctly declared can affect whether the lender can progress your application.

Explore how your deposit affects LTV

Change any value and the other figures will update automatically.

Try an example: £250,000 home with a £25,000 deposit → 90% LTV

Property value

£40,000 £5,000,000

Changing the property value keeps the mortgage amount and recalculates your deposit or equity and LTV.

Deposit or equity

£0 £250,000

Mortgage amount

£0 £250,000

Loan-to-value

90%

0% 100%

Your loan-to-value

90%

A £225,000 mortgage on a £250,000 property.

90%

90% mortgage 10% deposit or equity

Search mortgages with these figures

Starts with a residential purchase. You can change the mortgage type and purpose in the search.

No mortgage borrowing needed

With these figures, the property value is fully covered by your deposit or equity. No mortgage borrowing is required.

Small mortgage amount

Fewer lenders offer mortgages below £25,000, so your options may be limited. Product and legal fees can also have a greater impact on the overall cost of a smaller mortgage.

Low property value

Fewer lenders offer mortgages on properties valued below £50,000. Minimum property values vary by lender and property type.

Buying to let?

If this is a buy-to-let purchase, most lenders cap borrowing at 75–80% loan-to-value, with some specialist options reaching 85%. This cap applies to buy-to-let mortgages only — residential lending typically extends to 95%.

High-LTV residential mortgage

Residential mortgages above 95% LTV have limited availability and often require a specialist mortgage product or scheme. Talk to your mortgage adviser about your options.

No deposit or equity buffer

You have no deposit or equity buffer. A fall in the property's value could leave you owing more than it is worth. No-deposit residential mortgages have limited availability and specific eligibility requirements. Speak to your mortgage adviser.

Your total deposit, including any gifted amount, is £25,000 on a £250,000 property. That means a £225,000 mortgage at 90% LTV.

How a broker can help in practice

A broker’s role is to coordinate the mortgage process and help ensure the application is prepared with the right information from the start.

For gifted deposits, that often means:

understanding how your deposit is made up (gifted, savings, and any other sources)
identifying where additional documentation may be needed due to account movements
helping you and your solicitor plan timing and evidence so the money trail is clear

These first-time buyer mortgage examples do not filter for lenders’ gifted-deposit criteria; an adviser can check the rules for your circumstances.

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