The Bank of Mum and Dad is genuinely one of the largest mortgage lenders in the UK by volume, bigger than several mid-tier high street banks, with roughly half of first-time buyers receiving some form of family financial help. But “family help” isn’t one single thing – three genuinely different structures exist, each solving a different problem, and choosing the wrong one can cost thousands in Stamp Duty alone.
Why the Right Structure Depends on the Actual Problem
As Which? puts it clearly: guarantor mortgages are better suited if a buyer is struggling to save for a deposit, while a JBSP structure helps if the buyer needs help accessing a larger mortgage. These are genuinely different problems, and it’s worth being honest about which one you’re actually facing before choosing how family should help.
A Straightforward Cash Gift
Our Gifted Deposit Mortgage page covers the simplest route – family gives money outright, with no repayment expected and no ongoing claim on the property. It’s worth transferring gifted funds at least 90 days before your application and gathering source-of-funds documentation early, since timing mistakes here are a genuinely common cause of delay. For gifts over £50,000, it’s also worth a brief conversation with a tax adviser about the giver’s own Inheritance Tax position.
Guarantor: When Family Offers Security, Not Cash
Our Guarantor Mortgages page covers family offering their own savings or property as security rather than handing over cash directly – worth considering where family want to help without a gift being financially realistic for them, though it’s genuinely become less common as JBSP has taken over much of this territory in recent years.
JBSP: The Structure That Solves Two Problems at Once
Our Joint Borrower Sole Proprietor (JBSP) Mortgage page covers a genuinely distinct structure – a parent’s income goes on the mortgage application, boosting what you can borrow, while only the child appears on the property title. This is the only structure that combines both levers: parental income support and first-time buyer Stamp Duty treatment preserved on the title.
The Worked Example That Explains Why This Matters So Much
If a parent who already owns a home were added directly to a joint mortgage and title, the purchase would typically trigger the additional-property Stamp Duty surcharge on the whole transaction, since the parent already owns elsewhere. With JBSP, since the parent never appears on the title, this surcharge is avoided entirely, and the child’s first-time buyer relief remains fully intact. On a genuinely typical family-help purchase, this saving alone can run into the tens of thousands – by far the single biggest financial argument for choosing JBSP over a standard joint mortgage.
Deposit and Loan-to-Value
JBSP mortgages are typically available up to 90% loan-to-value across the high street and building society sector, with some specialist lenders extending to 95% for suitable cases, generally at a modest rate premium. A gifted deposit can sit alongside a JBSP structure without affecting either the Stamp Duty position or the JBSP mechanics – the gift simply funds the cash portion of the purchase.
The Mistake That Can Void a Gift Entirely
It’s worth being genuinely clear about this: if a “gift” comes with any expectation of repayment, or the giver retains any claim on the property, lenders will reverse-engineer it as a disguised loan, reducing what you can actually borrow. A gift needs to be a genuine gift – if family want security or an eventual return of funds, a guarantor arrangement or a family deposit scheme is the honest structure to use instead, not a gift with informal strings attached.
Even a Small Amount of Family Help Genuinely Moves the Needle
Our First Time Buyer Mortgages page covers how even a modest 5% gifted contribution can unlock 95% loan-to-value products priced meaningfully lower than a genuine 100% mortgage – over five years on a £250,000 mortgage, this can save several thousand pounds in interest, worth knowing before assuming family help needs to be substantial to matter.
When the Family Conversation Is About Something Else Entirely
Sometimes the genuine need isn’t a first-time buyer deposit at all – it’s an older family member wanting to help fund a business, using their own home’s equity to do so. Our Homeowner Business Loans page covers this genuinely different scenario, worth reading if the family support you’re discussing runs in the opposite direction – an established homeowner backing a younger relative’s business, rather than helping with a house purchase.
Getting the Right Structure for Your Specific Family Situation
Given how much genuinely depends on whether your challenge is deposit size, borrowing capacity, or something else entirely, and how differently each structure is treated for Stamp Duty purposes, it’s worth having a proper conversation before assuming any one approach is automatically right. Get in touch with details of your circumstances and how family would like to help, and we’ll help you find the structure that genuinely fits.
