Can my parents help me buy a home?

Family help is now one of the most common routes onto the property ladder. Broadly, there are three ways parents can help: give you money towards the deposit, guarantee your mortgage with their savings or their home, or go on the mortgage with you. Each works differently, and each carries a different level of risk for the person helping.

A gifted deposit is money handed over that you are not expected to pay back, and it is the simplest arrangement: the parent is not on the mortgage or the deeds. A guarantor mortgage goes further, with the parent's savings or home used as security and an agreement to cover your payments if you default. A joint arrangement puts a parent's name on the mortgage itself, either with their name on the deeds too (a joint mortgage) or without (a joint borrower sole proprietor mortgage)¹.

The differences matter. A gift costs the parent nothing further once the money is handed over, while a guarantee or a joint mortgage can expose a parent to the whole debt, and in the worst case to losing their own home². This page explains each route, what evidence the lender will want, the tax rules around gifts, and how a parent gets off the mortgage later.

Three ways parents can help: a gift, a guarantee or a joint mortgage

The first question for any family is which of the routes suits them, because the three arrangements sit at different points on a line between simple and risky.

A gifted deposit is money given to a homebuyer to help them buy a property³. The parent hands over cash, the buyer puts it towards the deposit, and the parent has no further role: they are not on the mortgage, not on the deeds, and not liable if the buyer falls behind. The only strings attached are evidential (the lender will want proof of where the money came from) and potentially tax-related (the seven-year rule explained below).

A guarantor mortgage involves the parent using their savings or their home to help their child get a mortgage¹. The guarantor offers security and agrees to cover the mortgage payments if the buyer defaults (misses a payment)². Some guarantor mortgages even allow the buyer to borrow 100% of the property's value by using the guarantor's collateral in place of a deposit².

A joint arrangement puts the parent on the mortgage itself. In a standard joint mortgage, both the parent and child are named on the mortgage and the property deeds¹. In a joint borrower sole proprietor (JBSP) mortgage, both are named on the mortgage but only the child is named on the property deeds¹.

Which route suits a family depends on what the parent can offer and what they are willing to risk. A parent with spare cash may prefer a gift, since it ends their involvement at the point of transfer. A parent with substantial savings they cannot afford to give away, or a home they own outright, may be able to help through a guarantee instead. A parent whose help is their income rather than their capital may find a joint mortgage or JBSP is the only workable route, since the lender can take their earnings into account. The comparison page on gifted deposits versus joint borrower sole proprietor mortgages sets these two side by side in more detail.

Gifted deposits: money that never has to be paid back

A gifted deposit is money given to a homebuyer to help them buy a property³. The defining feature is that it does not have to be paid back: Principality's guidance describes it as a gift, meaning the buyer is not expected to repay the amount to their family member⁶. Once the money is paid into the buyer's account it becomes the buyer's money, though the buyer still needs to tell the lender where it came from⁷.

Gifted deposits usually come from close family members, including parents, step-parents, grandparents, siblings, and in-laws⁷. It is possible to use gifts from more than one person to make up the deposit⁷, and Principality's guidance also names grandparents, siblings, children, grandchildren and legal guardians as permitted sources⁶.

Two conditions are worth knowing about in advance. First, the buyer needs to provide evidence to the lender that the money will not have to be paid back⁸. Second, some lenders place a cap on what percentage of a deposit can be gifted⁸, so a buyer planning to fund the entire deposit from family money should check this with the lender early. Where the money comes from abroad, the lender might need to carry out some extra checks⁷.

A gift is not the only way family money can arrive. Principality gives a worked example of a parent who has paid off their own mortgage taking out a new mortgage to release funds to gift to a family member as a deposit booster: buying a first home for £120,000 with £6,000 saved, the parent borrows £6,000 on top of a £150,000 mortgage balance, so the loan increases to £156,000, repaid with interest over the remaining term⁶. That arrangement is a gift from the child's point of view, but a debt from the parent's, and the parent should be clear about the difference before signing anything.

The dedicated page on gifted deposits covers this route in full, and how much deposit you need explains the deposit itself.

Proving a gifted deposit to your lender and conveyancer

Lenders and conveyancers do not take a deposit's origins on trust. If the money is a gift, the buyer needs a letter from whoever gave the money⁹, and the lender may require proof that the money came from the parent, with a letter confirming the gift will not be repaid¹.

The conveyancer has a separate duty. As part of their money-laundering checks, the conveyancer might request bank statements as proof of the gift or loan¹. This is not an accusation of anything: it is a legal requirement on solicitors and conveyancers to trace where the money funding a purchase has come from. The page on what evidence you need for a gifted deposit lists the documents in detail.

The giver may also be required to sign a declaration that they have no legal interest in the property¹. This matters more than it sounds. A parent who has given money towards a home has no right to a share of it, no right to live in it, and no claim on it if the buyer sells, and the declaration is where that is put in writing. A parent who expects to retain some stake should not sign it, and should consider a joint mortgage or a declaration of trust instead.

Where the money comes from abroad, the lender might need to carry out some extra checks⁷, so families in that position should allow more time. The practical advice is to move the money early, keep a clear paper trail of where it has been, and expect to explain any large or unusual deposits into the buyer's account during the months before the application.

Inheritance Tax on a gift: the seven-year rule

A gift is not always free of tax consequences. The child might need to pay Inheritance Tax on a gifted deposit if the parent dies within seven years of handing over the money¹. This is the seven-year rule: gifts to individuals who are not your spouse are potentially exempt transfers, and the number of years between gifting something and your death determines whether the gift falls into the taxable estate¹⁰. If the giver survives the full seven years, the gift becomes completely exempt from Inheritance Tax⁴.

The rule works by pulling gifts back into the estate. Any property or money given away up to seven years before someone dies counts towards the inheritance valuation¹¹, and HMRC's guidance confirms the position for a beneficiary: the person who died may have given you a gift in the seven years before they died, which affects whether you owe Inheritance Tax¹². Gifts made more than seven years before death do not form part of the estate, regardless of their value, but they must be made without reservation, meaning the giver cannot continue to benefit from what they gave away¹³.

The same principle extends to trusts: if you die within seven years of placing assets in trust, they may be subject to Inheritance Tax¹⁴.

For the person dealing with an estate, the timing of the tax can be as difficult as the amount. You normally have to start paying Inheritance Tax before probate is granted¹⁵, though where assets may take time to sell, the tax can be paid in equal annual instalments over 10 years¹⁶.

There are allowances that sit alongside the seven-year rule. Many people know about the £3,000 annual gifting allowance, alongside the seven-year rule under which larger gifts usually become exempt if the giver survives seven years¹⁷. A separate rule applies to interest earned on money given to children: the £100 limit applies only to income from gifts from parents, step-parents or guardians, not to gifts from other family members such as grandparents or friends, and the threshold is £200 of interest if both parents give money¹⁸. That rule is about the child's savings income, not the deposit itself, but families making large gifts into savings accounts in the run-up to a purchase should be aware of it.

How does a guarantor mortgage work?

A guarantor mortgage is a mortgage where a close relative (or your ex-partner) agrees to guarantee the mortgage payments if you can't¹⁹. In practice this usually involves them offering their home or savings as security against your mortgage, and agreeing to cover the mortgage payments if you default². The guarantor is someone, typically a parent, who takes on some of the risk of the mortgage by acting as a guarantor³.

The security can take two forms. The lender will either hold some of the guarantor's savings in a locked account, or will use their property as security². Where property is used, the guarantor will usually need to own a high proportion of their property outright², which is why a parent with a large mortgage of their own may not qualify through this route.

Guarantor mortgages exist to solve a specific problem: a buyer with a low income, a small or no deposit, a bad credit score, or little or no credit history². Having a guarantor may enable a buyer to borrow more than their income alone would allow, and some guarantor mortgages even allow borrowing of 100% of the property's value by using the guarantor's collateral in place of a deposit². Which? notes that guarantor mortgages can allow the buyer to take out a 100% loan²⁰. Where bad credit is the issue, lenders decide on a case-by-case basis, and it is possible that the security a guarantor offers could offset the risk the buyer poses as a customer².

Many lenders will require the guarantor for your mortgage to be a close family member, usually a parent². Guarantors must be over 21⁵, and lenders will typically want to see savings or property and a good credit history, and will want the guarantor to have received legal advice².

MoneyHelper's guidance for anyone considering being a guarantor is direct about what the role means: it means taking on the responsibility for paying the whole mortgage if the mortgage borrower can't¹⁹. Anyone considering it should get independent legal advice and talk to a mortgage adviser before agreeing¹⁹.

Savings as security: cash locked away by a family member

One specific form of guarantor arrangement deserves its own explanation, because it is the version most often advertised to families: the family member deposits cash into a special account held by the lender, rather than offering their home.

Some lenders offer mortgages where a family member deposits cash, typically 5% to 20% of the property price, into a special account². The money is held as security for the mortgage, usually for a set period, and is released back to the family member once the buyer has built up enough equity or made enough payments to satisfy the lender. Because the security is cash rather than property, the family member's home is not at risk, which makes this route easier for many parents to accept.

The trade-off is that the money is locked away and unavailable for years. A family member putting savings into one of these accounts should assume they cannot access the money for the full term, whatever the marketing name of the product suggests, and should plan their own finances on that basis.

This route suits families where the parents have savings they can genuinely do without for the term, but cannot afford to give the money away outright. It does not suit families whose savings are their retirement fund or their emergency buffer, because the money cannot be released early if the parents' circumstances change. As with any guarantor arrangement, the parent should get independent legal advice before agreeing to it¹⁹.

Joint borrower sole proprietor: parents on the mortgage, not the deeds

A joint borrower sole proprietor mortgage splits the two things a joint mortgage joins together. Both the parent and child are named on the mortgage, but only the child is named on the property deeds¹. The parent's income counts towards what can be borrowed, but the parent has no ownership of the home.

The big difference, as Which? explains, is that while the parent and child are both named on the mortgage, only the child's name will be on the property's deeds, meaning the parent will be able to avoid the stamp duty surcharge². This matters in England and Northern Ireland, where a higher rate of Stamp Duty applies to additional properties, and in Scotland, where the Additional Dwelling Supplement works in a similar way. Revenue Scotland's guidance confirms the principle: the ADS will not apply where the helper does not jointly own the dwelling and the buyer owns one dwelling²¹. A parent who went on the deeds as well would normally be buying a second property and could face the surcharge.

Contrast this with a standard joint mortgage, where both names are on the mortgage and the property deeds². Joint mortgages allow a parent and child to buy a property together, with both sharing ownership as well as responsibility for the debt. The page on buying a home with someone else covers joint ownership, and joint tenants or tenants in common explains the two forms it can take.

The JBSP structure has clear advantages for the right family, but it is not a free pass. The parent is jointly liable for the whole mortgage, not a share of it, and being named on the mortgage affects how much they can borrow for themselves. Which? notes that older parents may struggle to get accepted for a JBSP, and lenders may prefer applications where the child can prove their earnings will rise significantly in the future², since the lender is being asked to rely on the child's income growing to carry the loan alone.

Age limits and income rules for parents who help

Lenders apply their own criteria to the helper as well as the buyer, and age is the most common obstacle.

For guarantor mortgages, the position is more forgiving than many parents expect. Since the guarantor will likely secure the mortgage through their savings or property, their income or employment status should not usually make a difference². A retired parent with substantial savings can therefore act as a guarantor where their pension income alone would not support a mortgage. The basic requirements are that the guarantor is over 21⁵, has savings or property, a good credit history, and has received legal advice².

For JBSP mortgages, age bites harder. Older parents may struggle to get accepted, and lenders may prefer applications where the child can prove their earnings will rise significantly in the future². Lenders typically set maximum ages at the end of the mortgage term, so a parent nearing retirement may find the available term too short to make the monthly payments affordable.

Where property is the security, the parent's own mortgage is the constraint rather than their age: the guarantor will usually need to own a high proportion of their property outright². A parent partway through a 25-year mortgage on their own home may simply not have enough equity to qualify.

Income rules for the buyer can interact with benefits in ways worth knowing. If you receive Income Support you may be able to get help with the cost of your mortgage and other home loans²², and homeowners on certain benefits may be able to get Support for Mortgage Interest, help towards mortgage interest payments²³. These are relevant to a family weighing whether a buyer can genuinely sustain the mortgage, and the page on first-time buyer schemes covers the government support available alongside family help.

What your parents risk if you can't pay

This is the section any parent helping a child should read before signing anything, because every route except a pure gift leaves the helper exposed.

If your child defaults on their mortgage payments, you'll be responsible¹. That is the whole of the liability, not a share of it: being a guarantor means taking on the responsibility for paying the whole mortgage if the mortgage borrower can't¹⁹.

The risk extends beyond the payments to the value of the home itself. The guarantor could be liable for any shortfall if the property has to be repossessed and sold². If the home is sold for less than the mortgage balance, in negative equity, your family member will be liable for meeting the shortfall, which may cost them their own home²⁰. Where the guarantor's own home is the security, that is the direct mechanism of loss; where savings are the security, the savings are lost first.

There are also consequences for the guarantor's credit record. A credit check is done on anyone who agrees to be a guarantor, and it is added to their credit file⁵. MoneyHelper's guidance on guarantor arrangements is that as long as the borrower pays back the debt on time, being a guarantor won't affect the credit rating, but payments made on the guarantor's behalf are added to their credit history and could reduce their credit score²⁴. Guarantor arrangements can negatively affect both people's credit score if not paid back on time²⁴.

For the buyer, the stakes are equally plain: if you don't make payments on a mortgage, you could lose your home²⁵. If trouble starts, the options narrow quickly, but they do not disappear. Some lenders agree to pay your selling fees, pause court action to give you time to sell, lower your mortgage payments, or give you a deposit and rent in advance to rent a home; this is sometimes called assisted voluntary sale²⁶. Asking the lender early, before arrears build up, preserves the most options.

Getting your parents off the mortgage later

None of these arrangements has to last the full mortgage term, and most families intend from the start that the parent's involvement will end once the buyer can stand alone.

For a guarantor mortgage, the exit route is to remortgage as soon as you can to a deal which doesn't require a guarantor, which may be possible as soon as you've built up enough equity in your property². Each remortgage is a fresh application, so the buyer will need to qualify on their own income and credit history at that point.

For a joint mortgage or JBSP, removing a parent is a name change on the mortgage, and it has a direct financial benefit for the person leaving: the person whose name is taken off the mortgage should be able to borrow more to buy themselves a home than if their name was still on the other mortgage¹⁹. MoneyHelper makes this point in the context of divorce, but the principle is the same for a parent: a mortgage they remain named on counts against their borrowing capacity for anything else.

The process normally involves the lender assessing whether the remaining borrower can afford the mortgage alone, and the buyer should expect a full affordability check. If the buyer cannot yet afford it, the parent stays liable, which is why the timing of the exit should be discussed at the outset rather than assumed.

If a guarantor dies before the arrangement ends, what happens depends on the lender. Some require you to find a new guarantor, while others will allow you to pay off some of the mortgage with your guarantor's estate². If the mortgage lender required life insurance, this may pay off the full amount of the loan; if there isn't any insurance, or for second mortgages not covered, the property may have to be sold²⁷. Families with a guarantor arrangement should ask the lender directly what its policy is, and consider whether life insurance on the buyer would protect everyone involved.

Where to get free help

Decisions in this area involve two sets of interests, the buyer's and the helper's, and they do not always point the same way. Free, independent help is available before anything is signed.

MoneyHelper's guidance is that anyone considering being a guarantor should get independent legal advice and talk to a mortgage adviser before agreeing to it¹⁹. That advice protects the parent, whose home or savings are on the line, and it is worth the parent paying for independent advice even where the buyer's mortgage advice is free. StepChange's guidance on being a guarantor sets out the checks worth making before agreeing, including being over 18 and over 21, being financially stable, and understanding that the credit check will be added to your credit file⁵.

For buyers, Citizens Advice covers the buying process end to end, including the schemes and support available²⁸, and the government's guide on how to buy a home lists which organisations can help²⁹. Where money trouble has already started, Support for Mortgage Interest may be available to homeowners on certain benefits²³, and Shelter's advice on selling to avoid repossession explains what lenders can agree to before court action begins²⁶.

The related pages on this site go further on each route: gifted deposits, buying a home with someone else, the costs of buying a house and first-time buyer schemes.