What Deposit Sources are Acceptable in the UK?

Are you unsure whether an investment can count towards your mortgage deposit? Want to borrow funds from a family member? Discover how deposit sourcing rules work and how to stay well within the money laundering security checks with our complete guide.

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Based on your yearly income, you may be able to borrow:

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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

What Deposit Sources are Acceptable in the UK?

One of the challenges for mortgage applicants is that they will need to demonstrate where their deposit comes from. Lenders have strict rules about acceptable deposit sources and may refuse a mortgage altogether if they cannot accept the deposit.

These rules all relate to money laundering, and the regulations vary between lenders.

In this guide, the mortgage brokers team has summarised the most common deposit sources and how they might impact your mortgage approval chances.

The following topics are covered below:

What Deposit Sources are Acceptable in the UK?

Deposit source

Likelihood of acceptance

Savings

If you use your own savings as a deposit, you are unlikely to have any issues. Most lenders are happy with this, although some might ask for a history of bank statements to verify how the total has accumulated.

 

Gifts

Deposits gifted from immediate family members are widely accepted. That usually includes parents, grandparents, siblings, aunts and uncles.

 

Gifts from more distant family members are less common, and some lenders won't accept this as a mortgage deposit.

 

Gifts from friends or third parties are usually rejected due to the higher risk of fraud - although some lenders can negotiate on this, with due diligence checks to verify the authenticity of the gift.

 

Inherited funds

Usually fine.

 

Property sale proceeds

Commonly accepted, provided there is no charge against the property in another name, and the funds have cleared.

 

Asset sale proceeds

Most lenders will accept a deposit raised from selling another asset, such as a car, a boat or a valuable possession.

 

Unsecured loans

Usually rejected, credit card or personal loan debt is often considered irresponsible lending.

 

A small number of lenders may accept a deposit, although they will need to assess affordability and the total debt to income ratio carefully.

 

Bridging loan

Short-term bridging finance is often an option as an alternative to a mortgage, for example, to buy an auction property or to buy a rental investment that isn't habitable so cannot be mortgaged straight away.

 

Gambling wins

A tricky area - some lenders will approve a deposit sourced from gambling wins, although they will usually need to see bank statements and conduct an assessment of your affordability.

 

Overseas deposits

Lenders may reject deposits from foreign accounts since the lender can't easily verify the source of the funds.

 

However, some banks will accept this deposit, provided they can track the money and have evidence such as bank statements showing that the funds are legitimate.

 

For any help with unusual deposit sources or verifying which lenders will accept your deposit, give Revolution Brokers a call on 0330 304 3040, or email the team at info@revolutionbrokers.co.uk.

These rules all relate to money laundering, and the regulations vary between lenders.

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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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