Saving for a mortgage deposit isn’t always easy, especially if you’re a first time buyer in Manchester.

With house prices continuing to rise, many buyers rely on family support to help them get on the property ladder. One of the most common ways to do this is through a gifted deposit.

As a mortgage broker in Manchester, we regularly support buyers who receive help from family to boost their deposit and improve their chances of getting a mortgage.

What does ‘gifted deposit’ mean?

A gifted deposit is money that’s given to you by someone else, typically a family member, to put towards your mortgage deposit. This money is a gift, not a loan, and it must not be repaid.

The person gifting the money will need to sign a declaration confirming that the funds are a genuine gift and that they won’t have any ownership of the property.

How can a gifted deposit help?

If you’re struggling to save a deposit from scratch, receiving a gifted deposit can make a big difference. You might be able to afford the monthly repayments, but the upfront deposit is often the biggest hurdle for first time buyers in Manchester.

A gifted deposit can:

  • Help you meet the minimum deposit required (usually 5% of the property’s value)
  • Increase your overall deposit amount, which can improve your loan-to-value (LTV)
  • Give you access to better interest rates and more competitive deals

For example, if your family gifts you 5% and you’ve saved another 5%, you’ll be applying with a 10% deposit, which could mean lower monthly repayments and better mortgage options.

Who can gift a deposit?

Most lenders accept gifted deposits from close family members, such as:

  • Parents (including adoptive or step-parents)
  • Grandparents
  • Siblings

Some lenders may also allow gifts from extended family or even close friends, but this varies. If you know who’s planning to gift the deposit, speak with a mortgage advisor in Manchester first. We’ll match your case to a lender whose criteria fit your situation.

What’s the difference between a gift and a loan?

A genuine gifted deposit is not repayable. This is important because mortgage lenders don’t want buyers to be taking on additional debt on top of the mortgage itself.

If someone loans you the deposit, lenders will usually see this as a risk, and many will reject the application. This is why your donor must confirm in writing that the funds are a gift and won’t need to be paid back.

Is there a limit on how much can be gifted?

There’s no maximum amount for a gifted deposit. Some parents or relatives might gift just enough to meet the 5% minimum requirement, while others may contribute 10% or more.

The bigger the deposit, the better your loan-to-value ratio and the more mortgage options you’ll likely have access to.

What proof do you need for a gifted deposit?

Lenders need to see where the gifted funds have come from. You’ll need to provide:

  • A signed gifted deposit letter from the donor
  • Proof of the donor’s ID and address
  • Bank statements showing the origin of the funds

We recommend keeping the money in the donor’s account until advised by your mortgage advisor in Manchester, to make the process smoother when evidencing the gift.

Do your parents know you need help?

Many first time buyers don’t realise that their parents might be willing, and able to help. We often speak to buyers who’ve never raised the question.

A conversation with your parents or close family could make a big difference. Even a partial gift can boost your deposit and open up more flexible mortgage options.

Some families also choose to gift early, rather than waiting to pass on inheritance later in life. Others may release equity from their own property to help their children get started.

Who can benefit from a gifted deposit?

Gifted deposits aren’t just for first time buyers. They can also help:

Whether you’re buying alone or with a partner, a gifted deposit can improve your affordability and reduce the amount you need to borrow.

Speak to a Mortgage Advisor in Manchester

If you’re planning to use a gifted deposit, or want to explore whether it’s possible, our team is here to help.

We’ll talk you through the process, check lender criteria, and help you provide all the evidence you need to keep your application on track.

Book your free initial mortgage appointment online and speak to an expert mortgage advisor in Manchester today.

Date Last Edited: June 20, 2025