If someone is helping fund your deposit — a parent, grandparent, or other family member — your lender won’t just take their word for it. They’ll want it in writing, in a specific form, before they’ll release funds. That document is usually called a gifted deposit letter, and getting the wording wrong is one of the most common, entirely avoidable reasons a completion date slips.
Gifted deposits are far more common than most first-time buyers expect. Rising house prices mean a growing share of buyers rely on some family contribution to reach the deposit they need, and lenders have built fairly standard processes around it. The letter itself is simple — but it has to say the right things, in the right order, or it gets sent back.
Below is a free template you can download and use, along with a full explanation of what needs to be in it, how much can be gifted, what your solicitor will separately ask for, and where this most often goes wrong.
Download the Gifted Deposit Letter Template →
What is a gifted deposit letter?
A gifted deposit letter is a signed declaration from whoever is gifting you money towards your deposit, confirming that the money is a genuine gift — not a loan, and not an investment with any expectation of repayment or ownership stake in the property.
Lenders ask for this because they need to be confident that:
- the money isn’t a disguised loan that would affect your affordability
- the person gifting the funds has no claim on the property
- the source of the money is legitimate, for anti-money-laundering purposes
Without this letter in the right form, your lender will simply pause your application until it’s provided — which is why it’s worth getting right the first time, not the third.
Who counts as an acceptable donor?
Most lenders are comfortable with gifts from immediate family — parents, grandparents, and siblings are almost universally accepted. Some extend this to aunts, uncles, or close family friends, but a number of lenders restrict acceptable donors to “immediate family” only, and a few won’t accept gifts from anyone outside parents and grandparents at all.
This is worth checking before the letter is drafted, not after. If your donor doesn’t fit your lender’s definition, the gift may need to be restructured, or you may need to look at a different lender entirely — something worth raising with a broker early rather than discovering at underwriting.
How much of a deposit can be gifted?
For most residential mortgages, the whole deposit can be gifted — there’s no general rule requiring buyers to have contributed a minimum amount from their own savings. Where this becomes more restrictive is with certain specialist products, guarantor mortgages, and some buy-to-let lending, where a lender may want to see evidence the buyer has “skin in the game” beyond the gifted sum.
If you’re a first-time buyer with a fully gifted deposit, it’s worth flagging this early in the process — some lenders ask for it to be declared upfront on the application rather than discovered during underwriting, and it can occasionally affect which products you’re eligible for.
What needs to be in the letter
Most lenders are fairly consistent on the core requirements, though it’s always worth checking your specific lender’s wording preferences. A compliant letter should include:
- Full name and address of the person gifting the money
- Their relationship to you (parent, grandparent, sibling, etc. — some lenders restrict who counts as an acceptable donor)
- The exact amount being gifted
- The address of the property being purchased
- A clear statement that the gift is non-repayable, with no interest and no expectation of any share in the property
- Confirmation the donor won’t reside in the property (or a note if they will, as this can affect the mortgage type)
- A statement on the source of the funds — savings, inheritance, sale of a property, etc.
- Signature and date
What your solicitor will separately ask for
The gifted deposit letter satisfies your lender, but your conveyancing solicitor has a related but separate requirement: evidencing where the money actually came from, for anti-money-laundering purposes. This typically means:
- bank statements showing the funds sitting in the donor’s account for a reasonable period beforehand
- if the money has recently arrived from elsewhere (an inheritance, a property sale, an overseas transfer), a paper trail showing that origin
- for larger gifts, sometimes proof of the donor’s identity and address, in the same way you’d provide your own
It’s worth telling your donor about this early. Being asked for bank statements can feel like an intrusion if it comes as a surprise midway through a transaction — far better to explain upfront that it’s standard practice.
A worked example
Say a buyer is purchasing a flat for £420,000 with a 10% deposit of £42,000, of which £25,000 is being gifted by a parent. The gifted deposit letter would confirm the parent’s details, their relationship to the buyer, the £25,000 figure specifically (not the full deposit), the property address, and a statement that the funds are non-repayable savings the parent has held for several years. The solicitor would separately request statements showing that £25,000 sitting in the parent’s account, and the lender’s underwriter would cross-reference the letter against the application before releasing a formal offer.
The letter and the solicitor’s evidence request are asking two different questions — “is this genuinely a gift” and “where did the money physically come from” — and both need answering, usually in parallel, for the transaction to move smoothly.
Where people usually get it wrong
A few things trip buyers up more often than the rest:
Vague relationship wording. “Family member” isn’t specific enough for most lenders — they want the exact relationship stated.
Missing the non-repayable clause. This is the single most important line in the letter, and the one most often left out of generic templates found online.
Using an outdated or generic template. Requirements shift slightly between lenders, and a template built for one bank’s intermediary portal won’t necessarily satisfy another’s compliance team.
Leaving the source of funds vague. “Savings” is fine if it’s true — but if questioned, the donor should be able to evidence it (bank statements, for instance), so it’s worth being accurate from the outset.
Leaving it too late. The letter itself takes minutes to complete, but gathering the evidence your solicitor needs — particularly if funds need to be moved or a paper trail assembled — can take longer than buyers expect. It’s worth sorting this in principle as soon as you know a gift is involved, well before you’re under offer.
How this varies between lenders
The core content above covers what nearly every lender wants, but “nearly every” is doing some work in that sentence — a few well-known lenders have requirements specific enough that a generic letter genuinely won’t do. Three worth knowing about:
Nationwide doesn’t accept a free-form letter at all — they require their own gifted deposit form, which additionally asks for the donor’s date of birth, nationality, and full current address including country. Nationwide is also unusual in allowing a conditionally repayable gift in specific circumstances: if the arrangement is structured as a family trust or second-charge agreement where the only condition is repayment on sale of the property, with no interest and no other claim, that’s still acceptable to them — most lenders would treat any repayment condition as disqualifying.
The Mortgage Works (Nationwide’s buy-to-let arm) is stricter again: gifts must come from a UK source only, with funds from overseas rejected outright rather than requiring extra evidence. The donor also cannot reside in the property under any circumstances — there’s no consent-to-mortgage exception here the way there is with most residential lenders. Their form is available here.
Halifax is closer to the general approach — either a letter written by the donor covering the standard points, or their own template, will do. Their donor definition is notably broad, extending to aunts and uncles by blood, family friends, and even a vendor or developer in specific new-build and concessionary purchase scenarios (though vendor gifts are not accepted on non-new-build purchases). Overseas donors are accepted, provided the funds have first been transferred into a UK bank account.
The practical takeaway: always check whether your specific lender has its own mandatory form before using a generic template. Where they do, that form takes precedence — a well-written free-form letter won’t be accepted in place of it. This is exactly the kind of detail that’s easy to miss and expensive in time once you’re mid-application, which is usually where a broker earns their keep.
A downloadable template
The template below covers the core wording most UK lenders expect. It’s designed to be filled in digitally or printed, and takes a few minutes to complete.
Download the Gifted Deposit Letter Template →
If you’re not sure whether your gifted deposit meets your specific lender’s requirements — or whether the structure of the gift could affect your affordability assessment — it’s worth checking before you submit anything. We’re happy to look over the wording with you.
Frequently asked questions
Does a gifted deposit letter need to be witnessed or notarised?
No, in almost all cases a signature is sufficient — it doesn’t need to be witnessed or notarised. Your solicitor will usually request the letter as part of the conveyancing process, alongside proof of the funds’ source.
Can more than one person gift a deposit?
Yes. Where more than one person is contributing, most lenders want a separate letter — or a single letter with all donors named and signing — confirming each person’s contribution and relationship to the buyer.
Does a gifted deposit affect how much I can borrow?
Not directly — lenders assess affordability based on your income and outgoings, not the source of your deposit. But a larger deposit does improve your loan-to-value ratio, which can open up better rates.
What if the person gifting the deposit wants it repaid eventually?
Then it isn’t a gift in the eyes of a lender — it’s a loan, and needs to be declared and assessed as such. Declaring a loan as a gift to satisfy a lender is mortgage fraud, so it’s important the letter reflects reality.
Are there tax implications for the person gifting the money?
Potentially, yes — gifts can have inheritance tax implications for the donor’s estate depending on the amount and how long they survive after making it. This falls outside mortgage advice, so it’s worth the donor speaking to an accountant or solicitor if the sum is significant.
Can a gifted deposit come from overseas?
Yes, but it typically requires more evidence — proof of the funds’ origin, currency conversion records, and sometimes additional identity checks on the donor. It’s worth flagging an overseas gift to your broker as early as possible, as it can extend the timeline.
Does the letter need to be on headed paper or in a specific format?
No — most lenders are only concerned with the content, not the formatting. A clearly completed template like the one above is generally sufficient, though it’s always worth confirming with your specific lender if you’re unsure.
