Some lenders offer 100% mortgages, but these have specific eligibility requirements and are not available or suitable for everyone. Many buyers use a deposit of 5% or more, depending on the lender, product and their circumstances.

With many more rules and regulations set in stone, mortgage lenders are now more confident when it comes to offering 95% mortgages.

95% deals are one option among a range of mortgage products. The more deposit you have available to put towards a property, the less you have to pay back, and you open yourself up to more competitive interest rates.

Deposits also act as a safety net for mortgage lenders. The reality is, they need to be confident you can make your monthly repayments. If you don’t, they’re at a financial disadvantage. With a large enough deposit, lenders are able to retain some of their finances should difficulties arise.

Saving for a deposit is hard for a lot of people, we know this. The leap from renting to becoming a first-time buyer in Sunderland can be a tricky one to navigate. This is especially the case if you are already renting or have a family, as any potential savings would already be split amongst various home essentials.

As an experienced and knowledgeable mortgage broker in Sunderland, we regularly find many deposit related questions being asked. Here we answer these as best we can, in the hopes you will gain a better understanding of how deposits work regarding the home buying process.

Is it better to put down more than 5% deposit for a mortgage?

Yes, it is! Larger deposits allow for improved interest rates. From here you possibly open yourself up to lower mortgage repayments per month, as you will also be borrowing less for your new home.

As touched on in the previous section, higher deposits put you at a lower risk the lender should things not go as planned, which really does work to your advantage. Lenders price products at different loan-to-value thresholds, often including 95%, 90% and 85%, but not every product follows five-percentage-point bands. Some products allow borrowing above 95%, subject to specific criteria.

Can I take out a personal loan for the deposit?

Though it doesn’t happen often, it has been known to crop up from time to time. However, this is considered by the lender as an additional credit commitment. Because of this, the lender will grant you a smaller mortgage than the one you might have initially planned for.

The majority of lenders would really rather you refrain from this option though, especially if you are looking to borrow 100% of the purchase price.

Do lenders accept gifted deposits for a mortgage?

The majority of lenders, at least the ones we have worked with, have no problem at all with members of your family and sometimes friends too, gifting your deposit.

The one who is gifting must be able to confirm that it is 100% a gift and not something you’re required to pay back to them over time. For the purposes of anti-money laundering, they may also need to provide them with identification and proof of your funds.

Given the term “The Bank of Mum & Dad” amongst home buyers and lenders alike, gifted deposits are seen a true lifeline for those struggling to get onto the property ladder. In truth, the market would look completely different if it were not an option!

Evidencing the deposit

For Anti-Money Laundering purposes, all applicants are required to fully evidence their funds by providing bank statements to the lender. They like to take a look at how exactly additional funds have been obtained too. Recent large cash deposits in your account can sometimes be an issue for lenders.

If you have made a large sale lately, like sell your car, you will need to provide a receipt and be able to prove that the amount it sold for matches the deposit made in your bank account.

Keeping money in an account for longer does not remove the need to evidence its source. Your lender and solicitor may still require a complete audit trail. Providing an audit trail for your deposit source can often be quite difficult for home buyers undergoing the mortgage process.

If your deposit will come from selling your current home, a memorandum of sale can help evidence the proposed transaction. Your lender or solicitor may also need details of the outstanding mortgage, expected net equity and eventual completion statement. A memorandum of sale alone does not prove that the funds are available.

Buying as a sitting tenant or buying from a family member – Do I need a deposit?

This all depends on personal circumstance, but no, you don’t necessarily need one. If the house has been genuinely discounted by the previous home owner, your lender may accept the discount as a means of deposit.

For example, a lender may accept some or all of a genuine discount on a family or landlord sale towards the deposit, but this depends on its concessionary-purchase criteria, valuation and your circumstances.

Right to Buy is a separate scheme for eligible council tenants and some housing association tenants with a Preserved Right to Buy. It does not generally apply to purchases from private landlords.

Please note that the above information is for reference purposes only and should not be taken as personal financial or mortgage advice to an individual.

Date Last Edited: 21/10/2026