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Homebuyers are increasingly turning to the Bank of Mum and Dad for help. Here's how you can help your children get on the property ladder, and everything you need to know about gifted deposits, tax implications and Bank of Mum and Dad mortgage options.
The Bank of Mum and Dad most commonly involves parents giving a gifted deposit, but parents can also provide support through loans, guarantor mortgages and Joint Borrower Sole Proprietor (JBSP) mortgages.
KEY INFORMATION
“The Bank of Mum and Dad” is commonly used when referring to parents who provide financial assistance to their adult children for major life expenses like buying a house. It has become more common due to rising house prices and living costs.
53% of first time buyers received help from the Bank of Mum and Dad to buy a property in 2025, a report by property firm Savills found.
Our own research in April 2024 found that more than half (54%) of homeowners with adult children have or expect to help their children financially to buy a home.
Amongst home owning parents with adult children who do not own their home:
If you worry about your child’s ability to buy a home, read on for ways to help, how the process works and the potential tax implications.
There are several ways parents can help their children buy their first home. The right option depends on your circumstances, whether you expect the money to be repaid and how much support your child needs.
| If you want to… | Consider |
|---|---|
| Give money | Gifted deposit |
| Lend money and get it back later | Loan |
| Help raise a deposit using your own home | Retirement interest-only mortgage or remortgaging to release equity |
| Act as a guarantor | Guarantor mortgage |
| Use your savings to reduce their mortgage interest | Family offset mortgage |
| Buy together | Joint mortgage |
| Help with affordability without owning the property | Joint Borrower Sole Proprietor (JBSP) mortgage |
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
| Years between gift and death | Inheritance tax rate |
|---|---|
| Less than three | 40% |
| Three | 32% |
| Four | 24% |
| Five | 16% |
| Six | 8% |
| Seven or more | 0% |
Read more in our guide How to keep on top of inheritance tax.
Research from Legal & General has found that 17% of over 55s were enduring a lower standard of living after helping their children buy a house.
So before you get involved in your child’s house purchase, we would strongly advise you get independent financial advice. An IFA can help you work out exactly how much assistance you can afford to give.
A study again by Legal & General and the Centre for Economic and Business Research in 2018 found 17% of parents lending money to their kids through the so-called ‘Bank of Mum and Dad’ are – or will be – worse off as a result. 10% of those surveyed felt less financially secure. 27% of parents and grandparents aged between 55 and 64 said they were accepting a lower standard of living as a result of acting as lender to a loved one.
You don’t have to make life’s big financial decisions alone. Get the right IFA for you today with our partners at Unbiased.
If you are giving your child money for a deposit to buy a house and they are buying a house with a partner or buying a house with friends, you can protect the money you have gifted in the event they split up with a deed of trust.
The solicitor working on the property purchase can draw up a deed of trust. This states who the money was gifted to – so you can specify you gave it to your child and not to them and their partner. If the couple break up this document will ensure your child retains ownership of your financial gift. It can also clarify if the money is a gift or a loan, and if the latter when it needs to be paid back.
The people buying the property can also use a deed of trust to lay out responsibilities for outgoings and what happens to the property if their relationship breaks down. See our advice guide on Deed of Trust which explains in detail what is involved.
Bear in mind though, that if your child goes on to marry the person they bought the property with this could affect the deed of trust.
While we are talking about the legal side of gifting money you should also consider updating your will to reflect the gift that has been made. Children may also want to write a will.
It may be that you can’t, or simply don’t want to, gift your child money to help them buy a house. Another option is to lend them the money.
It is relatively straightforward to draw up a loan agreement. This should set out any interest being paid on the loan and when it needs to be repaid – for example when the property is sold. You should also include what happens to the money if anyone involved in the loan dies, or if the parents need the money back.
Just be aware that a loan would need to be declared to a mortgage lender if one is involved in the purchase. This could have major implications for a mortgage. A loan could affect mortgage affordability calculations as lenders will factor repayments on the loan into the child’s outgoings.
Some banks won’t accept a borrowed deposit as the money comes with strings attached so it may limit the number of deals your child will be able to apply for.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
One way you may be able to raise cash to give your child a house deposit is to take out a retirement interest-only mortgage against your house. When you take out a retirement interest-only mortgage, you release equity from your home.
You then make repayments on the interest on your loan monthly (this means the amount you owe doesn’t increase over time). And you don’t have to repay the capital until you die or go into long-term care. At this point your home is sold, and the lender is repaid from the proceeds. Read more in our guide on Retirement interest-only mortgages.
However, if you’re considering this it’s important to take independent financial advice first.
Buying your first home with money from your parents? Here’s how it will affect the process:
Gifting money to help your child buy a house can be wonderfully generous, but it can throw up some problems. Here’s the pros and cons of using the Bank of Mum and Dad in the UK.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
There isn’t a single “Bank of Mum and Dad mortgage”. Instead, several different mortgage types allow parents to help children buy a home in different ways.
One type of ‘Bank of Mum and Dad mortgages’ are guarantor mortgages. This is when someone – usually a family member like a parent – acts as a guarantor by putting up savings or their property as security. If you use your savings as security you’ll typically earn interest on them but your savings will typically be tied up for a fixed period or until the amount owed falls below a certain threshold. You may be able to take out a no deposit mortgage with a guarantor mortgage.
This can make it much easier to get a first time buyer to get a mortgage but the risks to the guarantor can be significant. If the borrower misses payments or their house ends up being repossessed, the guarantor could lose some or all of their savings if they used them as security. While if you used your home as security, the worst case scenario is that you could lose your home. So take independent financial advice before going ahead with this. Read more in our guide Guarantor mortgages explained.
With family offset mortgages, the amount of interest the borrower pays is reduced by linking their mortgage deal to a family member’s savings account. There are some drawbacks though, for example the parent won’t earn interest on their savings. Plus, if the parent withdraws some of the cash, the borrower’s mortgage payments will increase. And lenders will usually put a lower limit on the amount of savings in the linked account.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
If you’re asking can I buy a house with my daughter or son, you may be able to take out a joint mortgage with your child, making you equally liable for the repayment of the loan. The upside is that with your combined incomes, you may be able to afford to take on a larger loan.
The big drawback to this plan is the additional stamp duty rate. So if you already own a property, then your child’s new home would count as a second home. This means there would be an additional 3% stamp duty due, which could make the property significantly more expensive.
Plus if it is your second home and you are still on the mortgage when the property is sold, there may be capital gains tax (CGT) liabilities.
Another increasingly popular option is a Joint Borrower Sole Proprietor (JBSP) mortgage, where parents help with affordability without becoming legal owners.
With these mortgages, which are another Bank of Mum and Dad mortgage option, you apply with someone who’s willing to accept joint responsibility for making mortgage payments without having a legal claim to the property.
With JBSP mortgages, the parent and child will both be named on the mortgage. But only the child will be named on the property’s deeds. This means the stamp duty surcharge can be avoided.
However, both applicants will need to pass affordability checks to show they can afford the mortgage payments.
Before considering taking out any type of Bank of Mum and Dad mortgage, make sure you get independent financial advice to make sure you’re making the best decision for you. It’s advisable to get mortgage advice too.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
Gifts and loans from the Bank of Mum and Dad added up to £8.3 billion in 2025, rising to £11 billion when inheritance is included, according to the latest analysis from property firm Savills.
More than half of all first‑time buyers (53%) received direct financial support from family members to help them get onto the property ladder.
Gifted deposits remain the most common form of support, with twice as many buyers receiving them as those who benefit from family loans (32% compared with 16%).
But whether or not you can help your child by giving financial support from the Bank of Mum and Dad, part of helping your son or daughter buy a house is about making sure they’ve done everything they can to help themselves financially including:
Housebuilder Persimmon has a ‘Bank of Mum and Dad scheme’ that means if you’re a first time buyer and a family member contributes 5% or more towards the price of your home, they’ll receive a cash thank you from the builder after completion. This offer applies to selected plots only.
Yes. Most banks will accept a gifted deposit from a parent to their son or daughter but they may ask for written confirmation from you stating it is a true gift. Find out more about what you need to declare in our guide Gifted Deposits Explained
There is no limit in how much parents can give their children through the Bank of Mum and Dad. They can pay for their house completely if they wish. But there may be inheritance tax implications – read our guide on How to avoid inheritance tax.
Depending on factors including the amount of money you want to give a child, there could be inheritance tax implications. Read our guide on How to avoid inheritance tax and it’s a good idea to get specialist tax advice too.
Parents handed over £6.3 billion to help their kids get onto the property ladder in 2021 according to Legal & General – this puts the Bank of Mum and Dad in the top ten lenders in the UK. If you want to give your child money to buy a house, read our guide Gifted Deposits Explained to find out how the process works.
Yes. While many parents help by giving a gifted deposit, there are other ways to support them in buying a home. Depending on your circumstances, you may be able to help through a guarantor mortgage, Joint Borrower Sole Proprietor (JBSP) mortgage, family offset mortgage or by lending money.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
HomeOwners Alliance Ltd is an Introducer Appointed Representative of Mortgage Advice Bureau (Derby) Limited which is authorised and regulated by the Financial Conduct Authority.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of LifeSearch Limited, an Appointed Representative of LifeSearch Partners Ltd, authorised and regulated by the Financial Conduct Authority. (FRN: 656479).
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