Gifted deposit

A gift from family is one of the most common ways first-time buyers bridge the deposit gap. Lenders accept them routinely — but they require specific paperwork, and the gift must genuinely be a gift.

Last checked 13 September 2026.

Seven sections. Each anchored to a first-party source, checked 13 September 2026.

1. Gift versus loan

A gifted deposit must be a gift with no expectation of repayment and no interest charged. If the donor expects to be repaid, it is a loan, and lenders treat a loan as a liability that reduces how much you can borrow. Some lenders accept loans from family as part of the deposit; most do not, and all that do will factor the repayments into their affordability calculation. Being clear with both the lender and your solicitor about whether the money is a gift or a loan is essential: misrepresenting it is mortgage fraud.

2. Who can gift the deposit

Most lenders accept gifts from immediate family: parents, grandparents, siblings. Some will accept gifts from more distant relatives. Gifts from friends, employers, or third parties unconnected to you are treated with much more scepticism and are declined by many lenders, because the source of funds is harder to verify and the anti-money laundering risk is higher. Ask a broker which lenders will accept the specific source of your gift before you apply.

3. The gift letter

The lender will require a signed gift letter from the donor confirming:

• The donor's full name and address.
• Their relationship to you.
• The exact amount being gifted.
• That the money is a gift, not a loan, and that no repayment is expected.
• That the donor will have no interest in the property.

Lenders have their own gift letter templates. Your solicitor or broker will provide the right form for the lender you are using. Do not use a generic template without checking it meets the lender's requirements.

4. Anti-money laundering checks

Your solicitor is legally required to verify the source of all funds used in a property purchase, including a gifted deposit, under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. In practice this means the donor will need to show where the money came from: bank statements, savings history, sale proceeds, or inheritance documentation. The longer the money has been sitting in the donor's account, the simpler this usually is. HMRC publishes the legal framework: GOV.UK — Money Laundering Regulations.

5. Your own contribution

Some lenders require a minimum amount of the deposit to come from your own savings, not from a gift. A common requirement is 5% of the purchase price from your own funds. Others accept a 100% gifted deposit. Check this before you choose a lender: if you have no savings and the entire deposit is gifted, your lender options are narrower, especially at higher loan-to-value ratios.

6. When to have the gift in place

The gift should be in your bank account before you exchange contracts, and the solicitor will need to see it there. Some lenders ask for the gift funds to be in your account at application stage; others are satisfied with a letter confirming it will be provided before exchange. Clarify the timing with your solicitor and broker early so there are no delays at exchange.

7. Telling your solicitor

Disclose the gifted deposit to your solicitor at the start of the conveyancing process. Do not wait until they ask. The solicitor has independent duties under anti-money laundering law and will need time to complete the required checks on the donor's funds. Late disclosure can delay exchange.

Brokers whose website mentions first-time buyer mortgages

886 firms in our directory mention first-time buyer mortgages on their own website. That's what they say about themselves, not an assessment by us, so check that a firm handles your situation and look it up on the FCA Register before taking advice.

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