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Parents helping out with the deposit

Parents helping out with the deposit

Category: Mortgages

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Trying to build up a deposit can seem like a never-ending task, and in some cases completely unattainable – even if you only need 5% it can easily run into tens of thousands of pounds, particularly with rising house prices adding extra pressure. However, some lucky first-time buyers have the bank of Mum and Dad to fall back on, and the general trend is for parents to "go Dutch" on their child's deposit.

According to research from Santander Mortgages, current homeowners received an average of 49% of the deposit from their parents, and a particularly lucky 68% won't have to pay any of it back as the financial input was intended to be a gift. However, almost three in ten (29%) will need to repay it as they received the money as the equivalent of an interest-free loan, while just 3% of parents saw the money they contributed as an investment.

And, for those yet to buy their first home, the financial input from their parents could add up to an even more significant sum. The average amount potential homeowners look to receive from their parents is £17,900 – with the average first-time buyer deposit being just under £25,000, this represents a 71.6% subsidy – however some think they'll be getting even more, with an optimistic 22% estimating that their parents will contribute £20,000+ to their deposit.

Happily, though, it seems that a lot of parents are more than willing to provide some form of financial contribution to that all-important deposit, with 34% of parents whose children are yet to buy a home saying they'll contribute money in order to help them onto the property ladder.

Of course, handing over such a significant sum of money isn't a decision to be taken lightly, as Sylvia Waycot, editor of, comments:

"If your branch of the bank of Mum and Dad has a surplus of cash to help offspring get onto the housing ladder, then why wouldn't you? However, whenever it comes to money, it is better to think with the head and not the heart.

"Before parting with what can sometimes be quite large lump sums, spare a thought for your own long-term needs. Are you sure your pension pot is going to adequately support you, have you cleared any outstanding debts of your own, will the money be needed for long-term care of any sort and finally, why do you have the pot of money to start off with – were you saving for a purpose?

"The answers to these questions should help you decide if you are open for business, or if you'll need to put up the cashier closed sign."

However, if you've weighed up all the options and still want to help your children get on the ladder, hopefully you'll have the facilities available. Ideally it's something you'd have been contemplating for a while and will have been able to put some of your savings into a deposit fund, or if your children are still a few years away from flying the nest then now's the time to think about building up that savings pot.

And, if your children are already eyeing up their dream homes, it could be time to start considering mortgage options. Thankfully there are now plenty of mortgages available to first-time buyers, and if you've amassed a 5% deposit between you you'll certainly not be short of possibilities. Check out our pick of the top first-time buyer mortgages or use our calculator for a more personalised idea of the products available, and you'll be one step closer to helping your children realise their dream of homeownership.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.