Mortgage Guides
Gifted deposits
NatWest mortgages are available to over 18s. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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What is a gifted deposit? Open in new window
How does a gifted deposit work? Open in new window
What to include in a gifted deposit letter Open in new window
Can I use a gifted deposit as a first time buyer? Open in new window
NatWest's gifted deposit policy Open in new window
Gifted deposit FAQs Open in new window
Get an Agreement in Principle Open in new window
What is a gifted deposit?
When you take out a mortgage, you'll need to place a mortgage deposit. This is an amount of money you pay upfront towards the cost of the property.
A gifted deposit means someone else, often a family member, provides the funds for some, or all of, your mortgage deposit.
How much deposit will I need for a mortgage? Open in new window
How does a gifted deposit work?
As the name suggests, a gifted house deposit is a gift. This means the person giving the money doesn’t expect repayment.
When you receive a gifted deposit, make sure you can prove the transaction is legal. This is often very easy to do – especially if it’s a mortgage deposit gift from your parents or a friend.
All you need to do is:
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01
Confirm the gifted deposit amount with the person who gave you the money and add it to your deposit savings.It’s a good idea to get it in writing.
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Declare your gifted deposit. When putting down your mortgage deposit, you need to declare how much of it was a gift. You can do this by handing in a gifted deposit letter to your lender.
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Provide any extra details. Your lender might require further information to confirm your gifted deposit. For example, you might be asked to provide:
- To confirm the identification of your donor – for example, your parents.
- Bank statements. To help confirm where the funds came from. Lenders may also need to perform anti-money-laundering checks.
Why do I need a gifted deposit letter?
If part or all of your house deposit has been gifted, a mortgage lender may ask for proof that it’s a gift. A gifted deposit letter shows that you’re not expected to pay the amount back. This is sometimes referred to as a 'gifted deposit declaration'.
A gifted deposit letter is signed by the gifting party or parties. Your conveyancer or lender can help ensure the letter has everything it needs to support your mortgage application.
What to include in a gifted deposit letter
Most gifted deposit letters will require the following:
- The name of the receiver of the gifted deposit.
- The source of your gifted deposit. For example, your parents, or a friend.
- The relationship between you and the donor/s.
- The value of the gifted deposit.
- That the donor expects no repayment.
- That the donor makes no claim to the property.
Can I use a gifted deposit as a first time buyer?
Yes, you can use gifts to help make up a mortgage deposit for a first time buyer mortgage.
The most common scenario is children receiving a mortgage deposit gift from their parents.
Using a gift as a house deposit is different to taking out a loan.A gifted deposit is usually received without any expectation of repayment or stake in the property.
Note: You can’t use an unsecured repayable loan towards your NatWest mortgage deposit. This includes those from a bank or other financial institution.
What is NatWest's gifted deposit policy?
At NatWest, we currently don't havemaximum gifted deposit limits. This means that a gifted deposit can be used to cover any percentage of the total deposit within a property purchase.
Looking to take out a NatWest mortgage with a gifted deposit? We require a confirmation letter or email (no signature required) from the gifting party. This should confirm whether the gift is either non-repayable or repayable.
If repayable, the details of the repayment should be outlined in the letter. This will then be included in affordability calculations. This is how we decide how likely you are to be able to affordmortgage repayments.
Our first time buyer guide
Getting on the housing ladder can be a daunting prospect. Our first time buyer guide is here with some useful information, tips and things to consider.
See our guide for first time buyer mortgages Open in new window
More tips on saving for your deposit
Saving for a deposit can be difficult. There's no silver-bullet, but there are things you can do to make the process easier.
Read our deposit saving tips Open in new window
Information Message
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With our range of 95% mortgages, you could buy your new home with just a 5% deposit with NatWest.
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Exclusions & eligibility criteria apply.
Gifted deposits: FAQs
No. At NatWest we allow gifted deposits from third parties, such as friends. Whoever the donor is, a gifted deposit letter will be required as described above.
However, unlike gifted deposits from family members, gifts from other third parties are only accepted if they are not repayable.
Yes, it is possible to use multiple gifts towards your mortgage deposit.
You’ll need to provide information about the source of each gift. You’ll also be required to submit individual gifted deposit declarations for each sum.
Gifted deposits are usually tax-free in the UK. However, it could be subject to inheritance tax if:
- the gifted amount is above £3,000
- the donor has no further tax allowance
- the donor passes away within seven years of gifting the money.
There are no limits on what you can give as a gifted deposit. However, some lenders may have their own stipulations. You may want to keep in mind that you may have to pay inheritance tax for larger amounts, or if your donor dies within seven years.
Not declaring a gifted deposit could affect your mortgage application. Lenders will require you to declare any gifted amounts. This is because they need to know where your deposit is coming from, and whether you’re expected to repay it.
More mortgage guides and information
Take a look at our handy mortgage guides
How do mortgages work? Open in new window
What is mortgage equity? Open in new window
A guide to first time buyer mortgages Open in new window
Home buying costs guide Open in new window
Surveys and valuations Open in new window
What is Stamp Duty? Open in new window
Other useful information and help
What is an Agreement in Principle? Open in new window
How do I apply for a mortgage? Open in new window
Find out about 95% mortgages Open in new window
Help getting a mortgage for the self-employed Open in new window
I'm struggling with my mortgage payments Open in new window
