A buyer tells you their parents are helping with the deposit. It sounds like the easiest part of the case — the money exists, it is not borrowed, nobody has to qualify for anything. Then the file stalls for three weeks while a lender asks the donor for bank statements going back six months, a certified passport, and a letter on a specific template that nobody mentioned at the start. Gifted deposits are accepted almost everywhere and they derail timelines constantly, for the same reason: the money is fine, the paperwork proving it is fine is where the work sits. This guide covers who is allowed to give, what the gift letter has to say, how source-of-funds checks actually run, the gift-versus-loan distinction that decides borrowing capacity, and a worked example of what a gift is genuinely worth in rate terms.
A lender's definition is narrower than a family's. For money to count as a gifted deposit it must be non-repayable, and the donor must retain no interest in the property — no share of the eventual sale proceeds, no right to live there, no charge over the title. If any of those exist, the lender is no longer looking at a gift. It is looking at a second party with a claim on an asset it holds as security, and that changes the risk entirely.
This is why the paperwork is so specific. A lender repossessing a property needs to sell it cleanly. A parent who contributed €60,000 and believes they own a slice of the house is a legal problem waiting to happen, and the gift letter exists mainly to close that door in writing before completion. Everything else in the process — the identity checks, the statements, the declarations — is anti-money-laundering compliance stacked on top.
Who is allowed to give
Donor eligibility is the first thing to establish, because it is binary and it is lender-specific. The typical hierarchy:
Parents and step-parents — accepted essentially everywhere.
Grandparents, siblings, children — accepted by most lenders, occasionally with extra conditions.
Aunts, uncles, cousins, in-laws — a real split in the market; some accept, some decline outright.
Friends, partners not on the mortgage, employers — accepted rarely, and usually only with a documented explanation of the relationship.
The seller, developer, or selling agent — effectively never. A vendor gift is a price reduction in disguise and distorts the valuation the loan is secured against.
Ask who the donor is before you research products, not after. Placing a case with a lender that does not accept gifts from the buyer's uncle and discovering it at underwriting costs a fortnight for nothing.
Multiple donors and part-gifts
Two sets of parents contributing to one purchase is common and fine, but each donor needs their own letter, their own identity documents and their own source-of-funds trail. Where it gets awkward is a gift from a divorced or separated couple who no longer speak — both signatures are still needed, and it is better to discover that at the outset than the week before exchange.
The gift letter, line by line
Most lenders publish a template. Where they do not, the letter needs to carry all of the following, signed and dated by every donor:
Donor's full name, address, and relationship to the buyer.
The exact amount being gifted, in figures.
The address of the property being purchased.
An explicit statement that the sum is a gift and is not repayable.
Confirmation the donor will hold no legal or beneficial interest in the property and no right of occupation.
A declaration that the donor is solvent and is not made insolvent by the gift.
Confirmation of where the funds came from — savings, a property sale, an inheritance, a pension release.
The conveyancer will usually want their own version of this too, so assume two letters, not one. Getting the donor to sign both in the same sitting saves a week of chasing.
Source of funds: the part that actually causes delays
The letter states the money is a gift. Source-of-funds checks establish that the money is clean. These are separate exercises and buyers routinely conflate them.
Expect the donor to be asked for photo identification and proof of address, bank statements covering roughly three to six months, and a documented explanation for any large credit into their account. A €50,000 deposit that appeared in the donor's current account eight weeks ago will be queried. If it came from a property sale, the completion statement resolves it in a day; if it came from selling a car, a cryptocurrency position, or years of cash savings, the query can run for weeks.
The practical rule: move gift money into the donor's main account as early as possible and keep the evidence of where it came from with it. Seasoned funds sitting in one place ask fewer questions than money that arrives mid-application. The same discipline applies to the buyer's own savings, which is the ground covered in our guide to the proof of funds letter that agents will ask for alongside the offer.
Gift versus loan — and why the answer changes the loan size
If the family money is repayable, it is a loan, and the treatment diverges sharply. A repayable family loan is a monthly commitment. It enters the affordability calculation on the same side of the ledger as a car finance agreement and a credit card, and it reduces borrowing capacity accordingly — the mechanics are the same ones set out in how mortgage affordability is calculated. Some lenders decline family loans entirely; others accept them with the repayment declared.
There is no upside to describing a loan as a gift. The donor signs a declaration, the buyer is asked directly, and repayments show up in bank statements. Beyond being fraud, it is fragile fraud. If the family genuinely expects the money back, price it as a commitment and find a lender comfortable with it.
A worked example: what a €40,000 gift is worth
Take an illustrative purchase at €400,000. The buyer has saved €40,000 — a 10% deposit, a 90% loan of €360,000. Their parents offer a further €40,000.
Without the gift: €360,000 at 90% LTV. At an illustrative 5.4% over 30 years, the monthly repayment is roughly €2,022.
With the gift: deposit €80,000, loan €320,000, LTV 80%. Lower LTV bands typically price better; at an illustrative 4.9% over 30 years the repayment is roughly €1,698.
The monthly saving is about €324, or roughly €3,900 a year. Over the full 30-year term the difference in total payments is in the region of €117,000 — a return of nearly three times the gift itself, before considering that €40,000 less was borrowed in the first place. The rate improvement alone is worth more than most buyers assume, which is the argument that often persuades a hesitant donor to give now rather than later. (Rates and bands are illustrative and vary by lender and market; the point is the shape of the effect, not the numbers.)
Note what did not change: income. The gift did not raise the affordability ceiling directly. It bought a better rate, and the better rate lowered the stressed payment, which is why a gift near an LTV band boundary is worth far more than the same money in the middle of a band. Finding the boundary is worth ten minutes with a calculator before the gift amount is fixed.
What this means for agents and advisors
For a buyers' agent, a gifted deposit is a qualification question, not a formality. Two follow-ups separate a real buyer from an optimistic one: is the gift confirmed in writing by the donor, and is the money already in an accessible account? A buyer whose parents are "planning to help" with funds still tied up in an unsold property is a chain risk that has not been disclosed as one.
For advisors, the win is front-loading. Request the donor pack — letter, identity documents, statements — at the same time you request the buyer's, rather than when underwriting asks. And when you are showing a client what the gift actually buys them, the argument lands harder with evidence about the property attached: Biedradar turns an address into comparable sales, a valuation range and local market signals in a branded report, so the deposit conversation sits next to a defensible view of what the property is worth.
That combination — a documented gift and a defensible valuation — is also what protects the case at the survey stage. A gift sized to the asking price rather than the market value leaves nothing in reserve when the valuation comes back low, and topping up a deposit mid-transaction means going back to the donor for more money and a second letter. Sizing the contribution against real comparable evidence, using the same discipline as any property valuation, keeps a generous gift from being spent entirely on an optimistic price.
Frequently asked questions
What is a gifted deposit?
A gifted deposit is money given to a buyer — almost always by a close family member — to fund part or all of the deposit, with no expectation of repayment and no interest in the property in return. That last part is what makes it a gift in a lender's eyes. Money handed over on the understanding that it will be paid back, or that the donor gets a share of the sale proceeds, is not a gift: it is a loan or a beneficial interest, and it is assessed completely differently.
Do lenders accept gifted deposits?
Most mainstream lenders accept them routinely, and family gifts fund a large share of first-time purchases. What varies is who is allowed to give. Nearly every lender accepts parents; many accept grandparents and siblings; fewer accept aunts, uncles or the buyer's employer; and almost none accept a gift from the seller, the developer or the selling agent, because that would distort the price the property is being valued against.
What does a gifted deposit letter need to say?
At minimum: the donor's name, address and relationship to the buyer; the exact amount; the property being purchased; a clear statement that the money is a gift and is not repayable; a confirmation that the donor retains no interest or rights in the property; and a statement that the donor is not being made insolvent by giving it. It is signed and dated by every donor, and most lenders want it on their own template rather than a free-form letter.
Can a gifted deposit come from abroad?
Often yes, but expect a slower file. Cross-border gifts trigger heavier anti-money-laundering scrutiny: the donor's identity documents, evidence of where the money came from, bank statements showing it leaving their account, and sometimes a translated and certified gift letter. Some lenders restrict gifts from jurisdictions on higher-risk lists. The practical advice is to move the funds early and document every hop, because the delay is usually in the checks, not the transfer.
Does a gifted deposit affect how much you can borrow?
Not directly — affordability is still calculated from income and commitments. What the gift changes is the loan-to-value ratio, and that is where the money is. A larger deposit drops the case into a lower LTV band, which usually means a lower interest rate, which lowers the stressed payment the lender tests against. So a gift can indirectly increase the maximum loan by improving the rate the affordability calculation runs on.
What happens if the gift is really a loan?
Declaring a repayable loan as a gift is mortgage fraud, and it usually surfaces anyway. Lenders ask directly, the donor signs a declaration, and the repayment shows up in bank statements at the affordability stage. A genuine family loan is not fatal — some lenders accept it — but it is treated as a monthly commitment, which reduces borrowing capacity. The honest route almost always produces a better outcome than the discovered one.
