What is a giftor and who can be one?

A giftor is someone who provides a financial gift to help you purchase a property. Typically, giftors are close family members or friends who want to support your homebuying journey. Gifted deposits are not a loan, whoever gifts you a deposit is offering it generously with no strings attached, they don’t expect repayment and retain zero rights or interest in the property you are buying. Common giftors include parents, grandparents, or siblings. Some lenders may restrict where your gifted funds come from, so it’s best to check first with your lender.

What is a gifted deposit letter?

A gifted deposit letter is a document that confirms the details of your gifted deposit to your mortgage lender. It’s an important piece of paperwork that most lenders require. The gifted deposit letter typically includes: The giftor’s personal details The gift amount A statement confirming the money is a non-refundable gift Confirmation that the giftor has no rights to the property Typically, lenders provide a template for this letter that the giftor simply needs to fill out and sign. They’ll also need to provide ID, proof of address, and bank statements to show where the money is coming from (proof of funds).

Can I use a gifted deposit as a first-time buyer?

Absolutely! Gifted deposits are particularly common and helpful for first-time buyers. With rising house prices, many struggle to save enough for a deposit on their own. A gifted deposit can make the difference between getting on the property ladder and not. As a first-time buyer, you can use a gifted deposit to boost your savings, potentially accessing better mortgage rates and more property options. Just remember to be transparent with your lender about the gift and follow their specific requirements. They’ll want to ensure the money is truly a gift and not a loan in disguise.

Why is a bigger deposit better?

A bigger deposit brings several advantages when buying a home. First, it reduces the amount you need to borrow, leading to lower monthly mortgage repayments, making homeownership more affordable. Secondly, a larger deposit often unlocks better mortgage deals with lower interest rates. Lenders will view you as a lower risk, so more likely to offer you favourable terms. A bigger deposit will also give you more options in the property market. You might be able to afford a pricier home or have a wider choice from your budget.

What is the process for gifted deposits?

The process for gifted deposits typically involves three key steps: Confirm the gift with a deposit letter: As mentioned earlier, the giftor needs to fill out and sign a gifted deposit letter, stating the amount and confirming it’s a non-refundable gift with no string attached, Complete ID checks for the giftor: To satisfy anti-money laundering regulations, the giftor must provide identification and proof of address. Get proof of funds: The giftor needs to supply bank statements or other documentation showing where the gifted money is coming from. Remember to inform both your mortgage lender and conveyancer about the gift as early as possible. They’ll guide you through any specific requirements they may have.

Gifted deposits explained

Find out how gifted deposits can help first-time buyers get on the property ladder and what you need to know about using them.

Last updated 24 Dec 2025

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Key takeaways

A gifted deposit is money given with no strings attached, not a loan to be repaid

Declare gifted deposit to both your lender and conveyancer, providing the necessary documentation

Consider the benefits of a larger deposit, including better mortgage rates and more property options

Explore alternatives like guarantor mortgages or joint mortgages if a gifted deposit isn’t available

Gifted deposits explained

With house prices reaching record highs, getting on the property ladder has become increasingly challenging for aspiring homeowners. According to the Office for National Statistics, the average house now costs £288,000, requiring a minimum 5% deposit of £14,400 - and that's before considering other purchase costs.

While saving for a deposit remains one of the biggest hurdles for first-time buyers, gifted deposits from family or friends are becoming an increasingly common solution. This financial boost can make the difference between securing a mortgage approval and continuing to rent, particularly in today's competitive market.

Let's break down everything you need to know about gifted deposits:

What is a gifted deposit?

A gifted deposit is money given to you by close family or friends to help cover the purchase price of the property. It’s one of the most generous gifts someone can give.

The funds are simply gifted with no strings attached – it is not a loan that needs repaying. The gift money may come from the donor’s savings, or they may even tap into their home equity if they want to help even more.

Gifted deposits can feel like a lifesaver when trying to buy your first home. Having that financial gift from family or friends is incredibly generous, it can help you borrow more and broaden your purchase options. However, processes need to be followed, it’s not as simple as just transferring cash from one account to another.

Learn more:

First-time buyers ultimate guide

Gifted deposits explained

Find out how gifted deposits can help first-time buyers get on the property ladder and what you need to know about using them.

Gifted deposits explained

What is a gifted deposit?

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