If you’re looking to get a mortgage and have a friend or family member who is willing to help you with a lump sum, that’s called a Gifted Deposit. A gifted deposit can form part of all of your mortgage deposit when buying a property but it does tend to be less favourable to lenders.
Saving up for a deposit is not always easy, a Gifted Deposit could help you raise the minimum of 5% that you need or get you to a more substantial 10 – 15%, which will help you secure a cheaper mortgage deal and lower monthly payments.
A Gifted Deposit is a common way for parents to help their children get onto the property ladder. If parents want to help but don’t have the funds themselves, Equity Release may be an option.
This varies between lenders. Typically, lenders prefer the donator to be a family member, some specify that it must be parents.
If you have a friend or distance relative that wants to help, it’s important to check with your lender or broker that this will be possible.
There are also alternatives to a Gifted Deposit such as ‘Family Offset Mortgages’. Your family could also act as a guarantor.
We would recommend speaking with a mortgage broker to work out which is the best route to take for you personally.