Parents Providing the deposit as second charge

Posted on 6 December 2016 by Rob


Is it generally acceptable by funders for us as parents to provide the necessary deposit as a second charge on our daughters house purchase in order to enable her to secure a mortgage for which she has enough income to fund repayments? Many thanks, Rob.

Hi Rob,

This is an option with some lenders, though many are more comfortable with a gift for the deposit. There are also some lenders that have products where you can put the deposit in a savings account in your name, and your daughter would then take a mortgage for the balance. The monies stay in the savings account until the fixed rate ends, at which point you have access to them again, and can decide what to do next.

It would certainly be worth talking to one of our mortgage experts to go through your situation in more detail. They can then provide you with tailored advice to look at your next steps. If you'd like to do so, then please let me know and I'll sort a convenient time for one of them to contact you.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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