Understanding the Bank of Mum and Dad: Mortgage Support Explained

For many buyers, getting onto the property ladder—or moving up it—can be challenging. House prices in many areas remain high compared to average incomes, and lenders’ affordability assessments can restrict how much can be borrowed. Even where repayments are manageable, borrowers may struggle to raise a sufficient deposit or show the required income on paper.

In these situations, family support is often the deciding factor in making a purchase possible. This is where the so-called “Bank of Mum and Dad” comes in.

What Is the Bank of Mum and Dad?

The “Bank of Mum and Dad” isn’t a formal lender. Instead, it’s a phrase used to describe parents (or sometimes wider families) helping their children onto the property ladder. Support usually takes one of two forms:

• Income boost – where parents use their income to strengthen a mortgage application.
  

• Deposit boost – where parents provide funds or security to increase the deposit available.

Below we outline ten of the most common ways parents and family members can provide this support.

10 Ways the Bank of Mum and Dad Works

1. Gifted Deposit

The most common method. Parents gift savings or investments to be used as a deposit. The gift is usually non-refundable.

2. Remortgage or Equity Release

Parents may release equity from their own property—either via a standard remortgage or, for over-55s, through a Retirement Interest Only or Lifetime Mortgage.

3. Depositing Savings

Some lenders allow parents to deposit funds into a linked account, held for a set period (e.g. five years). The money is then returned, once the child has built up sufficient equity.

4. Cross-Charging

Parents can offer equity in their own property as security for their child’s mortgage. After an agreed time, the charge can be released.

5. A Loan

Instead of gifting, parents may loan money—repayable either in monthly installments or on property sale. Lenders will require disclosure, and this can sometimes affect affordability.

6. Living Rent-Free or Regulated Buy-to-Let

Parents may purchase a property outright and allow children to live rent-free, or with subsidised rent. Where a mortgage is needed, a regulated buy-to-let is usually required.

7. Family Concessionary Purchase

Parents sell their property to their children at below market value, effectively leaving equity in the home as a deposit.

8. Joint Mortgage

Parents go on the mortgage with their children. Lenders typically allow up to four applicants. However, this can create stamp duty and affordability considerations.

9. Guarantor Mortgage

Although less common today, parents can guarantee their child’s mortgage repayments if needed.

10. Joint Borrower Sole Proprietor (JBSP) Mortgage

An increasingly popular alternative. Parents join the mortgage but not the property deeds, avoiding second property stamp duty while boosting affordability .

Is the Bank of Mum and Dad a Good Idea?

Family support can be invaluable, helping buyers secure homes they could not otherwise afford. However, parents need to consider the opportunity cost of using their funds or property, particularly if those resources are earmarked for retirement income or other future needs. Clear advice and an exit strategy are essential.

What Are the Alternatives?

Mortgage affordability criteria have evolved, and some lenders are more flexible in recognising different income sources. Products such as 100% mortgages for first-time buyers have also returned in certain circumstances. Exploring all available options with a professional adviser is important before relying on family support. It’s also important to check each person’s credit score.

Beyond Parents: Bank of Children, Family and Friends

Support isn’t always one-way. Increasingly, adult children are helping parents who need later-life mortgages—using JBSP or similar arrangements. Friends and extended family can also play a role, although these arrangements require even more careful planning to avoid complications.

Final Thoughts

The Bank of Mum and Dad remains a major factor in today’s housing market. Whether through a deposit gift, income support, or other creative solutions, family involvement can help unlock opportunities. The key is ensuring that all parties receive the right advice and understand both the benefits and the risks involved.

Risk Warning: Your home may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

Regulatory Disclosure: Symmonds de Lacey is a trading name of Easy Street Financial Services Limited which is authorised and regulated by the Financial Conduct Authority. Easy Street Financial Services Limited is a company registered in England and Wales with company number 6430453. The registered office address is Basepoint, 377-399 London Road, Camberley, Surrey, GU15 3HL .

Information correct at time of writing – October 2025.