Gifted Deposit Mortgage FAQ
General information only. This is not financial advice.
Last reviewed: 2026-06-06
Can a gifted deposit be used for a mortgage in the UK?
Yes. Most UK mortgage lenders accept gifted deposits provided the gift is genuine (not a loan), the donor has no interest in the property, and the source of the funds can be evidenced. You will need a gift letter from the donor confirming the amount, the relationship, that the money is an unconditional gift, and that the donor has no legal interest in the property. The lender will also conduct anti-money laundering checks on the donor's funds.
Who is allowed to gift a mortgage deposit?
Most lenders accept gifts from immediate family members — parents, grandparents, siblings, and sometimes aunts, uncles, or step-parents. Some lenders also accept gifts from close friends or employers in specific circumstances. Gifts from non-family donors are accepted by fewer lenders and attract additional scrutiny. The donor cannot be the estate agent, developer, vendor, or any party with a financial interest in the sale. Always confirm with your broker which lenders accept your specific donor relationship.
What must a mortgage gift letter include?
A gift letter must typically state: the donor's full name and address; the donor's relationship to the borrower; the exact amount being gifted; that the funds are an unconditional gift and not a loan; that the donor has no financial or legal interest in the property; and the donor's signature and date. Some lenders require their own specific gift letter template. Your solicitor will confirm the required format during the conveyancing process.
What AML evidence is needed for a gifted deposit?
Lenders must verify that gifted deposit funds are not derived from criminal activity. This typically requires the donor's identity documents (passport or driving licence) and bank statements showing the gift funds accumulating in their account and the transfer to you. The donor may also need to show how the funds were generated — savings history, property sale proceeds, pension lump sum, inheritance, or similar. The level of evidence required varies by lender but has increased significantly in recent years.
Can the gifted deposit cover 100% of the required deposit?
Usually yes — most lenders allow the entire deposit to come from a gift, provided the LTV is within their normal criteria. A minority of lenders require the borrower to contribute at least 5% of the purchase price from their own savings. Government scheme purchases (shared ownership, First Homes) may have additional gifted deposit rules. Your broker will confirm the full deposit policy before submitting your application.
Does a gifted deposit need to be repaid?
No. A genuine gift carries no expectation of repayment. If repayment is intended, even informally, it is legally a loan and must be disclosed to the lender. Presenting a loan as a gift is mortgage fraud. Undisclosed loans also affect affordability: lenders reduce your borrowing capacity if you have a repayment obligation, even an informal one. If the donor wants some future recognition (e.g. a share of sale proceeds), a solicitor should advise on a deed of trust rather than treating the arrangement as a simple gift.
Risk warning
Your home may be repossessed if you do not keep up repayments on your mortgage. Misrepresenting funds as a gift when repayment is intended constitutes mortgage fraud.
Explore further