Gifted deposits and source of deposit: what mortgage lenders accept

When a lender asks for your "source of deposit", it wants to know where the money for your deposit came from and to see proof. Most UK lenders accept gifted deposits, usually from family, as long as the gift doesn't have to be paid back and the giver gets no share of the home. Here's which deposit sources lenders accept, what evidence they ask for, and how to avoid delays.

Lender criteria vary and change often. This guide covers the usual rules, not the rules for any one lender.

Gifted deposits

Widely accepted

Most lenders accept gifts from close family. Fewer accept gifts from friends.

The golden rule

No strings

A signed letter confirms the gift isn't repayable and gives no stake in the home.

Paper trail

3–6 months

Bank statements are commonly requested, from you and often from the person giving the gift.

New-build incentives

Often 5%

Many lenders cap builder deposit contributions and incentives at around 5% of the price.

What does "source of deposit" mean?

It's the origin of the money you're putting down, such as savings, a gift or the equity from a sale. The lender and your solicitor both need to see where it came from and how it reached your account.

They ask for two reasons. Anti-money laundering law requires them to check that the funds are legitimate. And the lender needs to know the deposit isn't secretly borrowed, because a hidden loan would change what you can afford.

Where can my mortgage deposit come from?

Here's how lenders typically treat the most common sources. Individual lenders can be stricter or more flexible, so treat this as a starting point.

Lifetime ISA: homes up to £450,000, bought at least 12 months after your first payment, with a mortgage and through a conveyancer. Help to Buy ISAs closed to new savers, but existing holders can claim the bonus until November 2030 on homes up to £250,000 (£450,000 in London). The government consulted in June 2026 on a new first-time buyer ISA to replace the Lifetime ISA.

How gifted deposits work

A gifted deposit is money given to you towards your purchase with no expectation of getting it back. Parents are the most common givers, but grandparents and other relatives often help too.

How a gifted deposit is checked

The money needs a clear trail from the giver to your solicitor

The gifted deposit letter

Lenders usually ask for a signed letter or their own declaration form. Some want it addressed to them and dated within the last few months.

Who can give you a deposit?

Checks on the person giving the gift

Your solicitor must carry out anti-money laundering checks on the giver as well as on you. Expect them to ask for photo ID, proof of address and typically three to six months of bank statements showing the money building up. A large lump sum in the giver's account will need explaining too, for example with a sale completion statement or an inheritance.

Gifts from abroad are often accepted but take longer to check. Lenders commonly ask for a longer statement history and want the money in a UK account before completion.

Gift or loan from parents: why it matters

If your parents expect to be repaid, it's a loan, and you must say so. A loan adds a monthly commitment that lenders include in affordability, and most won't accept a borrowed deposit. Calling a loan a gift on a lender's form is mortgage fraud.

If your family wants to help but can't simply give the money, other options exist:

• Joint borrower sole proprietor: a parent joins the mortgage to boost affordability but isn't on the deeds. Read our joint borrower sole proprietor guide.
• Family deposit or savings-backed mortgages: a relative places savings in a linked account as security for a set period, then usually gets it back with interest.
• Guarantor mortgages: a family member guarantees the repayments. This is a serious commitment, so they should take independent advice.

Vendor gifted deposits and builder incentives

A "vendor gifted deposit" is when the seller agrees a discount on the price and that discount counts towards your deposit. Most lenders won't accept this from a private seller. The main exception is a concessionary purchase, where a family member or landlord sells to you below market value and the discount is treated as a gifted equity deposit. Only some lenders offer this.

New builds are different. Builders often offer deposit contributions, cashback or paid legal fees. These must be declared on the UK Finance Disclosure of Incentives form, and many lenders cap the total. Nationwide, for example, limits a builder's cashback or deposit contribution to 5% of the price or valuation, whichever is lower. Above a lender's limit, it may reduce the amount it lends.

Large deposits and unexplained transactions

Underwriters read your bank statements closely. Big one-off credits, frequent cash deposits or transfers between people with no obvious reason will lead to questions and can delay your offer. You can learn more about what underwriters look for.

Why you can't just move money into someone else's account

You can pay money into another person's account, but routing deposit money through friends or several accounts breaks the trail and raises money laundering concerns. Solicitors must trace funds back to a legitimate source and can refuse to proceed, or report suspicions, if they can't. Keep it simple: one transfer from the giver's account, with a letter explaining it.

Do gifted deposits have tax implications?

You don't pay income tax on a gift. The possible issue is inheritance tax for the giver's estate. If the giver lives for seven years after the gift, no inheritance tax is due on it. If they die sooner and their total gifts in those seven years exceed the £325,000 threshold, tax may be payable, reduced by taper relief for gifts made three to seven years before death.

Some gifts are exempt straight away. Each person can give away £3,000 a year in total, and carry forward one year's unused allowance. Wedding gifts of up to £5,000 to a child are also exempt.

Rates apply only where gifts exceed the £325,000 threshold. We are not tax advisers and this is not tax advice: it is a general summary based on the rules published at the time of writing, and we make no warranty about any tax that may be due. For larger gifts, the giver should speak to a qualified tax adviser or solicitor.

Using a gifted deposit: step by step

1. Agree the giftConfirm the amount, and that it really is a gift with no repayment and no share in the home.
2. Talk to a broker firstNot every lender accepts every giver or source. Choosing the right lender at the start avoids a decline later.
3. Gather the evidenceThe giver collects ID and statements, and explains any large sums in their account.
4. Move the money cleanlyOne transfer, to you or your solicitor, as your solicitor directs.
5. Sign the declarationThe giver signs the lender's form or a gifted deposit letter.
6. Solicitor checks and completesAML checks are done, the lender is told about the gift and the deposit is used at completion.

Frequently asked questions

Which mortgage lenders accept gifted deposits?

Most high street lenders and many specialist lenders do. The differences are in who can give, how much evidence they want and whether they accept gifts from abroad. A broker can match your giver to the right lender.

What's the best mortgage for a family gifted deposit?

A gifted deposit is treated like any other deposit for pricing, so a bigger deposit can unlock lower loan-to-value rates. The best deal depends on your income, the property and which lenders accept your giver. See our September 2026 rates update.

Can my parents lend me the deposit instead?

Some lenders allow it, but you must disclose the loan and the repayments will reduce how much you can borrow. A gift or a family-assisted mortgage is usually more straightforward.

How far back will lenders check my bank statements?

Commonly three to six months, sometimes longer for money from overseas. Your solicitor may ask for more if a large sum needs explaining.

Can I use a deposit from selling crypto?

Some lenders will, if you can show the full trail from purchase to sale and into a UK bank account. Many won't. Our crypto and mortgages article has more.

Get your deposit accepted first time

Most deposit problems come from picking a lender whose rules don't fit your giver or your paperwork. Quick Mortgages is a whole-of-market broker with no broker fees. We check your deposit source against lender criteria, including specialist lenders, before we apply.

Buying your first home? See our first-time buyer mortgages. Serving in the armed forces? Read about Forces Help to Buy. Or try our mortgage search tool.

Speak to an adviser

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Disclaimer:

This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.

While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.