With many lenders requiring a minimum of 10% deposit, getting onto the property ladder can be challenging for first-time buyers. However, mortgage deals that allow parents or other family members to provide financial support can make it easier to buy a first home.

In the year 2024 to 2025, over 30% of first-time buyers used a gift or loan from family or a friend to source their deposit. If this is an option that you are considering, you can find out more about what the process involves below.

What is a gifted mortgage deposit?

A gifted mortgage deposit is a sum of money typically provided by a family member so that first-time buyers can afford to purchase a property. Gifted mortgage deposits are different to family loans and do not need to be repaid, and the person gifting does not own any portion of the property.

Who can gift a deposit?

The rules around who is accepted to gift a deposit varies across different lenders. Generally, lenders prefer the person to be a close relative, such as a parent, step-parent, grandparent or sibling. However, some lenders may accept gifts from extended family members or close friends, but the criteria will usually be stricter.

How lenders view gifted deposits

The lenders that we work with at James Leighton Financial Services view gifted deposits as a positive solution to helping first-time buyers to purchase their first property. However, they will perform due diligence to ensure that there are no concerns around money laundering and that the deposit is a genuine gift and not a loan that increases the applicant’s debt. 

Using a gifted deposit often strengthens applications, as the lender knows that it will help the applicant’s affordability of the mortgage.