Buying Your First Home with a Gifted Deposit

Saving for your first home can feel like a huge challenge, especially when house prices and the cost of living make it difficult to build up a deposit. That is why more and more first-time buyers are turning to family support in the form of a gifted deposit.

At Principle Finance, we regularly help buyers purchase their first property with a gifted deposit. Here is what you need to know.

What is a gifted deposit?

A gifted deposit is money given to you by a family member to put towards the purchase of your home. The important point is that it is a gift, not a loan. The person giving the money must confirm that they do not expect repayment. This reassurance helps lenders know you are not taking on extra debt.

Why are gifted deposits so common?

Affordability: Renting while saving can be difficult, so a gift can make a big difference.

Lower borrowing: A higher deposit means borrowing less, reducing monthly repayments.

Better mortgage deals: Some lenders offer lower interest rates if you can put down a larger deposit.

What lenders will ask for

Most mortgage lenders will require:

A gifted deposit letter from the donor, confirming the money is a gift and non-repayable

Proof of funds, such as recent bank statements, to meet anti-money laundering checks

ID from the donor, to verify their identity and relationship to you.

Your solicitor will also need these documents, so it is a good idea to have everything in place early.

Things to keep in mind

Always tell your mortgage broker and solicitor about the gifted deposit from the start.

Budget carefully to ensure you can comfortably manage mortgage repayments and household bills.

Different lenders have different rules, so getting the right advice can help avoid delays or surprises.

How Principle Finance can help

Using a gifted deposit does not need to be complicated. We will guide you through every stage of the process, from choosing the right lender to making sure the paperwork is in place. With our support, you can move forward with confidence and focus on the exciting part – getting the keys to your first home.

Ready to start your journey? Get in touch with Principle Finance on 0330 107 1558 or email [email protected] to discuss your options.

As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments. This site is intended for UK residents only and the laws of England are applicable.