Getting on the property ladder isn’t always easy, but thankfully, you don’t have to do it alone. There are plenty of ways parents can help first-time buyers, from gifted deposits and gifted equity to joint mortgages.
Each option has its own pros and cons, so it’s important to understand how they work before deciding what’s right for your family. This guide explains the main ways parents can help, the advantages and disadvantages of each, and what first-time buyers and parents should consider before taking the next step.
Your parents were there for your first steps, so understandably, they may want to help you take your first step onto the property ladder too!
We all know that buying a house for the first time isn’t necessarily straightforward! The Bank of Mum and Dad can help in several ways, depending on the support you need and the support they can give.
For some first-time buyers, the biggest challenge is saving a deposit. A gifted deposit can help you reach this milestone sooner, while gifted equity allows parents to use value built up in their own property to help fund your deposit.
For others, the challenge may be affordability rather than the deposit itself. A joint mortgage with your parents could help by combining incomes, making it easier to meet lender affordability criteria and potentially increasing how much you’re able to borrow. Parents may also be able to provide support in other ways, such as helping you save for longer or covering some of the costs involved in buying a home.
The best option for parents helping first-time buyers will depend on your circumstances, the deposit you need and the type of support they’re able to provide. The table below outlines the main options, who they are best suited for, and how they work.
Option
Best for
How it works
Gifted deposit
First-time buyers who need help building their deposit.
Your parents give you money towards your deposit that you don’t need to repay, helping reduce the amount you need to save.
Gifted equity
First-time buyers whose parents have value built up in their property.
Your parents use equity from their own property to help fund your purchase, rather than relying on cash savings.
Joint mortgage
Buyers who need extra income to improve affordability.
You apply for a mortgage with your parents, combining your incomes to potentially increase how much you can borrow.
Loan
Buyers whose parents want to provide support that is repaid over time.
Your parents lend you money towards your purchase, with repayment terms in place.
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A gifted deposit is money given by a parent or close relative to put towards the buyer’s deposit. By increasing the deposit, the loan-to-value (LTV) falls, which can open up more lenders and lower interest rates.
For mortgage purposes, the gift must be unconditional: the giver cannot expect repayment and does not gain a beneficial interest in the property through the gift alone.
This route is common for families exploring parent help mortgage options and forms a core part of how parents helping with mortgage plans can help their kids get onto the property ladder without tying up their home or risking their home as security.
Gifted equity can mean different things depending on the situation.
When a parent is helping you buy a new property, it usually involves releasing equity from their own home and gifting this money to help with your deposit.
Gifted equity can also refer to when a parent sells a property to their child for less than its market value. The difference between the sale price and the property’s value is treated as a gift of equity.
If your parents want to use gifted equity to help you buy a home, they will need to access some of the value they have built up in their own property. This could be done by remortgaging or borrowing more against their home.
For example, if your parents own a home worth £300,000 and still have £100,000 left to pay on their mortgage, they effectively own £200,000 of that property outright. This is known as equity. So long as their lender agrees and they can afford the higher repayments, they may be able to increase the amount they owe on their mortgage to release a portion of this equity, for example, £10,000 or £20,000, and gift this towards your deposit.
If your parents are considering using gifted equity to help you buy your first home, there are a few important things you’ll both need to bear in mind.
Another option available is to take out a joint mortgage with your parents. Buying together can make a big difference to what you can afford. By combining incomes, you may be able to borrow more and boost your buying power.
Everyone named on the mortgage is equally responsible for the repayments, so it’s important that all parties feel comfortable with the commitment.
When it comes to ownership, you can choose how the property is shared. You might own it in equal shares, or split it into defined percentages that reflect what each person has contributed. These details are usually recorded in a simple legal document called a declaration of trust, giving everyone clarity and peace of mind from day one.
Advantages
Challenges
It’s a good idea for everyone involved to get their own legal advice, just to make sure everything is clear. Talk through how bills and maintenance will be shared, and consider a simple agreement, like a cohabitation agreement or declaration of trust, to set things out from the start.
It also helps to plan for the future - for example, parents could step back when the mortgage is remortgaged, or the loan-to-value has fallen.
Parental support can help first-time buyers get on the property ladder faster, but it's important to carefully plan.Key considerations for parents helping to buy a house
With a little planning, these steps make parental support practical and straightforward, helping families support each other with confidence.
Your parents might be helping you get onto the property ladder, but they don’t have to be the only ones in your corner. Parents choose Persimmon because they know we are here to guide you through every step of the journey, so you can find not just your first home, but your home sweet home.
Plus, with schemes to thank Mum and Dad for their support, there’s a little something in it for them too! Helping you buy your first home is a pretty big milestone for them too, after all.
Getting help from your parents can make buying your first home feel more achievable, but choosing the right home is still a big part of the journey. New-build homes offer practical advantages that help first-time buyers keep costs predictable and protect monthly budgets.New builds to suit first-time buyers
When Aaron and Jasmine bought their first home at Orchard Mews in Pershore, they found the process to be far less complicated and stressful than they had imagined buying a house would be. Here’s their story.
At Persimmon, we know that family support can be a vital step toward getting on the property ladder - especially for first-time buyers. That’s why we’ve created the Bank of Mum and Dad scheme to make parental or family help work harder when you’re buying a new Persimmon home.
If you’re a first-time buyer and a parent (or close family member) gifts you at least 5% of the purchase price, Persimmon Homes will say thank you by gifting them £2,000 after completion - helping recognise their support in a meaningful way.
This scheme is a practical option if you’re asking “Can I help my child buy their first home?” - giving both you and your family the support and clarity you need to make home ownership a reality.
Mum and Dad might be helping you with your deposit or making your mortgage more affordable, but there’s still a lot to think about before buying your first home. Whether you’re trying to understand conveyancing or credit scores, savings or stamp duty, we’re here to help you and your family feel confident every step of the way.
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