Structure 1: gifted deposit
The simplest and most common structure. Parents transfer cash to the buyer, who applies for the mortgage solo. The lender treats the buyer as the only borrower; the parents have no ongoing involvement with the property or the loan. The buyer needs sufficient income to support the mortgage alone — typically 4.0x–4.5x gross earnings.
Gifted deposit letters are templated and accepted by virtually every UK lender. The donor confirms the gift is unconditional, that they retain no interest in the property, and that they won't expect repayment. Lenders may also ask for proof of the donor's funds — a recent bank statement showing the gift amount.
This structure works well when parents have spare capital and the buyer's income is sufficient. It avoids any complication around the parent's age, ownership, stamp duty or shared liability. The downside: the parents must genuinely be willing to part with the money permanently. The lender requirement is unconditional gift — and the parent's protection is essentially zero if the relationship or circumstances change later.
Structure 2: JBSP (Joint Borrower Sole Proprietor)
JBSP solves the problem of "parents have decent income but can't (or won't) part with cash." The parent joins the mortgage as a co-borrower — combining incomes for affordability — but stays off the property title. The child is the sole owner.
The key advantages are no stamp duty surcharge (because the parent isn't on the title, the additional 5% rate on second properties doesn't apply) and first-time buyer relief eligibility is preserved if the child qualifies. Affordability typically increases by 30%–80% versus the child's solo application.
The constraint is the parent's age. Most lenders cap the mortgage term to end by the parent's 70th or 75th birthday. A 65-year-old parent supporting a JBSP application at a 75th-birthday lender can only secure a 10-year term — which often collapses affordability. Specialist lenders like Family Building Society, Bath and Tipton & Coseley take more flexible views.
Structure 3: full joint mortgage
The traditional joint mortgage puts both parents and child on the mortgage and on the title. Everyone is a legal owner. This was historically the default route for family-supported purchases but is now uncommon for two reasons: stamp duty and complications around the parents' existing homeownership.
The stamp duty issue is significant. If parents already own a home (which most do), adding their name to a new property triggers the 5% additional rate surcharge across the whole purchase price. On a £300,000 home, that's an extra £15,000 in tax versus a JBSP or gifted deposit alternative. First-time buyer relief is also lost.
Full joint mortgages still occasionally make sense — particularly where parents want a legal stake in the property as protection of their contribution, or where the property is being bought as a future inheritance. But for most families, JBSP delivers the same affordability benefit at much lower tax cost.
Structure 4: family springboard / family deposit schemes
Barclays Family Springboard is the best-known example. Parents lock up an amount equal to 10% of the property price in a linked savings account for 5 years. The buyer takes a 100% LTV mortgage from Barclays. The parents earn interest on their savings (currently competitive); the child gets a no-deposit mortgage at rates close to standard 95% LTV products.
After 5 years, if the mortgage is up to date, the parents get their savings back with interest. If the mortgage falls into difficulty, Barclays can claim against the parents' savings to cover losses.
This structure suits parents with significant cash they want to deploy productively but not give away. It works particularly well in scenarios where the parents want to support but the child has weak deposit savings. Other lenders offer similar products under different names — Vernon Building Society's "Family Friendly" and Halifax's family-supported ranges are examples.
Structure 5: family offset mortgages
A family offset mortgage links the child's mortgage to a parent's savings account. The parents' offset balance reduces the interest the child pays — saving them money on every monthly payment. The parents retain ownership of the cash and can withdraw it.
Family Building Society and a handful of others offer this structure. It works particularly well where parents have £30,000–£100,000 in cash savings and want to provide ongoing financial benefit without giving the money away. The downside: the linked offset savings earn no interest, so parents need to weigh the saved mortgage interest (benefiting the child) against the savings interest they're forgoing.
Choosing the right structure
A practical decision framework: if parents have spare capital they'll never need back, a gifted deposit is simplest. If they have income but limited cash, JBSP boosts affordability without requiring capital. If they have substantial cash they want to keep control of, family offset or springboard preserve ownership while providing benefit. Full joint mortgages should generally be avoided unless there's a specific legal or estate reason for parents to be on the title.
Family conversations about housing money are difficult enough without choosing a structure that locks in tax inefficiency or affordability constraints. Sitting down with a mortgage broker before any money moves is almost always worth the modest cost of advice — particularly for sums above £30,000.
Tax and estate planning notes
Gifts of cash from parents to children are not taxable at the point of giving, but if the parent dies within 7 years they may form part of the parent's estate for inheritance tax purposes under the tapering rule. Each parent has an annual gift allowance of £3,000 and can pool unused allowances from the prior year.
Larger gifts (above the annual allowance) start using the parent's nil-rate band for IHT, which affects their estate planning. For families with material wealth, structuring deposit help as part of broader estate planning can save substantial tax — typically worth speaking to a financial planner about sums above £50,000.
Your home may be repossessed if you do not keep up repayments on your mortgage. First Rung Now is not FCA authorised or regulated; we introduce consumers to FCA-regulated mortgage brokers. Nothing in this article is financial or tax advice.