What is a Gifted Deposit Mortgage?

Gifted Deposit FAQs

In terms of gifted deposits, here are the answers to a few commonly asked questions

Who can gift the deposit?
Can it be a loan rather than a gift?
How much can be gifted? 

Who can gift the deposit?

It tends to be “Bank of Mum and Dad” (or Gran and Grandad) that gifts the deposit to the applicant and this is acceptable to most Lenders. The gift must be evidenced by way of bank statements from the donor and their ID.

Can it be a loan rather than a gift?

In most circumstances, it needs to be a gift and the donor will sign a letter to confirm the funds are non-refundable and they will not put a “charge” on the property you are buying.

How much can be gifted?

There is no maximum limit on the amount of gift you can receive.  As a rule, the more deposit you can put down the cheaper your monthly mortgage payment will be.

Some points to consider:

• We’ll recommend that the person gifting the money should seek independent legal advice to understand they will have no interest in the property and no right to get their money back.
• The person gifting the money will need to complete a gifted deposit letter (we’ll provide a template) or sometimes lenders have their own form to complete.
• We’ll need to see an audit trail of where the gift is coming from, this is usually a bank statement showing the build-up of funds.
• The gifted deposit can be used in conjunction with your own savings or the help to buy scheme.

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