Using gifted deposits for mortgages has become increasingly common over the past decade. Although rates have eased from recent highs, mortgage rates remain higher than those faced by the previous generation of first-time buyers, while house prices have risen sharply, increasing the size of deposits needed.
Raising a sufficient deposit is the most frequent hurdle for prospective home owners and can delay buying a property by years. For those fortunate enough to receive a gifted deposit, the path to purchase is often faster and more straightforward. Below, we explain the rules around gifted deposits, who is allowed to provide them, and which lenders are typically most comfortable accepting them.
Can you get a mortgage with a gifted deposit?
Yes, you can. For many first-time buyers, a gifted deposit mortgage is one of the simplest routes onto the property ladder. However, while most lenders accept gifted deposits in some form, each lender sets its own rules on who is allowed to provide your mortgage deposit.
In most cases, the person gifting the deposit can contribute as much or as little as they choose, although lenders typically expect a minimum deposit of around 5–10% of the property value. The good news is that many lenders will accept a deposit made up of both a gift and your own savings. So, if you have some deposit but not enough, someone else can top up the shortfall for you.
What are the rules around this?
Lenders that accept them usually apply broadly similar rules to gifted deposits, including:
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The gift must not be a loan. The lender will need confirmation that no repayment is expected, and that the donor will not have any legal interest in, or claim over, the property. The donor will usually need to sign a declaration to confirm this.
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The donor must pass checks. The person providing the gift will typically need to supply proof of ID and address, along with bank statements and evidence showing where the money came from. Solicitors will use this to complete Anti-Money Laundering (AML) checks.
Where lenders most often differ is who they will accept the gift from. Some are fairly strict and only allow close family (such as parents and grandparents). Others are more flexible and may consider deposits from wider family, partners, friends, or even business contacts.
Gifts from parents and close family
All lenders that accept gifted deposits will allow parents (including step-parents and adoptive parents) to provide them. Many also accept gifts from other close relatives, such as grandparents and siblings, although this can vary by lender.
Extended family
Fewer lenders will accept gifted deposits from more distant relatives, such as aunts, uncles, cousins, nieces, nephews, and children (including step-children and adopted children). That said, some lenders do allow this — it’s simply a matter of finding one that fits your circumstances.
Partner
Some lenders will accept a gifted deposit from a romantic partner, whether you are buying alone or together. However, there are fewer lenders willing to do so, and they may take a more cautious approach. If you are purchasing jointly and only one of you is contributing the deposit, the lender may treat that contribution as a gifted deposit.
Non-relatives
A small number of lenders will accept gifted deposits from friends, colleagues, or business partners. This is relatively niche, and you may need a more specialist lender for this type of arrangement.
Vendor gifted deposit mortgages
Vendor gifted deposits are most common with new-build properties, where the developer effectively reduces the purchase price by a set amount or percentage. Rather than providing cash, they are gifting you equity in the property, and the lender can treat this reduction as (or towards) your deposit.
How to get a mortgage with a gifted deposit
If you’re planning to purchase a home using a gifted deposit, these straightforward steps can help keep things on track:
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Find a suitable lender early. Start by looking for a lender that accepts gifted deposits from the type of donor you’re receiving it from. We can help by searching the whole market — mention this at the outset so we can match you with a lender whose criteria fit your situation.
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Get your documents ready. You’ll usually need to provide details about the donor, their relationship to you, and evidence of the source of the deposit.
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Obtain a gifted deposit letter. Make sure the person gifting you the money provides a signed letter confirming it is a genuine gift and that no repayment is expected.
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Select the right deal. Once the above is in place, the mortgage application process is broadly the same as for any other borrower. You may also qualify for a better rate if the gifted deposit significantly reduces your Loan to Value (LTV).
Which lenders accept gifted deposits?
Most — though not all — lenders will accept gifted deposits from immediate family. The key point is that “immediate family” isn’t defined the same way everywhere, and it can differ by lender. In many cases, parents, grandparents and siblings are treated as immediate family, but some lenders will also include aunts, uncles and children, while others will not. If your gifted deposit is coming from someone outside a lender’s definition of immediate family, it’s sensible to check upfront which lenders will accept that type of donor. Below are examples of how criteria can vary, but remember that lending policies can change at any time:
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Santander: Accept gifted deposits from immediate family members, such as parents, grandparents and siblings.
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Halifax: Only accept gifted deposits from immediate family members.
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Nationwide: Will accept gifts from anyone, as long as the gift is unconditional and the donor has no interest in the property.
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NatWest: Accept gifts from all relatives and may consider third parties (such as friends) if a gift letter is provided.
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Virgin Money: Accept gifted deposits from family members and from property vendors (new builds only).
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Skipton Building Society: Has a very flexible approach — gifted deposits may be considered from family, friends and, in certain cases, even landlords.
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Accord: Only accept gifted deposits from relatives by blood or by law.
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Vida Home Loans: Restrict gifted deposits to “close relatives”, which they define as parents (including step-parents and adoptive parents), siblings, grandparents, aunts and uncles, cousins, children, and nieces and nephews.
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Melton Building Society: May accept gifted deposits from non-parents, including extended family, friends and other third parties, but only up to 50% of the property value.
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The Cambridge Building Society: Will consider gifts from relatives by blood or by law, as well as spouses and civil partners.
Getting a buy-to-let mortgage with a gifted deposit
Using a gifted deposit to purchase a buy-to-let property is possible with many lenders, whether the money is coming from family or a non-family donor. That said, lenders that allow this arrangement often apply tighter criteria and more detailed checks, particularly for limited company buy-to-let mortgages.
Where a limited company is involved, you’ll usually need to demonstrate that the gift is intended for the benefit of one of the company’s directors or shareholders, and that the donor will have no ongoing interest in, or claim against, the business or the property. Anti-Money Laundering (AML) checks are also typically more rigorous for a company than for an individual, as verifying the source of funds can be more complex — especially where money is coming from overseas.
Frequently Asked Questions
There are usually no fixed financial limits on the minimum or maximum amount that can be gifted towards a mortgage deposit, provided the donor signs a declaration confirming it is a genuine gift and the required Anti-Money Laundering checks are completed. However, some lenders may set a cap on how much of the purchase price can be covered by a gifted deposit — for example, limiting it to 50% of the property value.