There are three main ways to help: give a deposit (a gifted deposit), boost how much they can borrow without owning the home (a JBSP mortgage), or back the loan with your income or property (a guarantor mortgage). A gift is the simplest and lowest-risk for you; JBSP and guarantor make you liable, so weigh them carefully.
The three routes, simply
- Gifted deposit: you give money towards the deposit. Lowest risk to you, just a short gift letter. See gifted deposit.
- JBSP: your income is added to boost their borrowing, but only they own the home and are on the deeds. See JBSP.
- Guarantor: you back the mortgage with your income, savings or property, stepping in if they cannot pay. See guarantor mortgages.
Which to choose
If you can simply give money, a gifted deposit is usually the cleanest: it lowers their loan-to-value and your risk ends there. If their deposit is fine but their income is too low to borrow enough, JBSP or a guarantor arrangement adds your strength to theirs. The trade-off is real: with JBSP and guarantor you take on liability for the mortgage, and your savings or home can be exposed, so these deserve careful thought and usually independent legal advice.
Worth taking advice
There can be tax angles too, for example inheritance tax on large gifts or a stamp duty surcharge if you go on the deeds, so a quick word with a tax adviser is wise. On the mortgage side, a regulated broker can lay out which option a lender will accept and what it commits you to. Speak to a regulated broker.
Founder, MortgageExplained
Adam spent over eight years as a mortgage adviser at Just Mortgages, with further experience in commercial finance. He is CeMAP and CF qualified. He built MortgageExplained to do one thing well: explain mortgages in plain English, so you know where you stand before you speak to a regulated broker. Every page on the site is written by Adam.
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