A 90% mortgage with a gifted deposit , built around family affordability
A single parent combined family support with a carefully assessed repayment mortgage, while keeping future renovation borrowing separate and addressing the risk of relying on one earned income.
Elizabeth Powell
Elizabeth reviewed the mortgage, existing commitments, renovation plans and protection needs together, so the recommendation reflected both the immediate purchase and the client’s wider family responsibilities.
The case at a glance
- The challenge
- A 90% mortgage needed to work alongside two dependants, existing credit commitments, recent overdraft use and a gifted deposit.
- The solution
- A five-year fixed capital-repayment mortgage over 29 years, with the renovation budget deliberately kept outside the purchase mortgage.
- The outcome
- The mortgage structure met the client’s repayment objective, while income protection was recommended and an estate-planning introduction was arranged.
Good income, but several affordability pressures to coordinate.
The client was a single parent with two young children, permanent employment and regular overtime. Court-ordered maintenance payments and child benefit also formed part of the household finances. The objective was to buy a new family home using a deposit gifted by the client’s mother.
The borrowing requirement was 90% loan-to-value. At that level, lender choice can narrow and affordability scrutiny becomes especially important. The client was also renting, had several existing credit commitments and had recently used an overdraft, so the application needed to show that the proposed mortgage remained sustainable after household costs and existing liabilities were taken into account.
- Family-assisted deposit The lender needed to be comfortable with the gifted deposit and the supporting evidence around its source.
- Existing commitments Personal borrowing, vehicle finance and other regular commitments reduced the headroom available within affordability calculations.
- One main earned income With two dependent children and limited emergency savings, the impact of sickness or injury mattered beyond the initial mortgage decision.
Prioritise the purchase, repayment certainty and a clear end date.
Elizabeth recommended a long-term residential repayment mortgage designed to keep the client’s payments predictable while ensuring the capital would be repaid before age 70. A five-year fixed period matched the client’s preference for certainty, while the 29-year term kept the monthly commitment within the assessed affordability range.
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Assess the whole household budget
Employment income, regular overtime, maintenance income, dependants, household expenditure and existing credit commitments were considered together rather than in isolation.
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Select a lender comfortable with the deposit and profile
The chosen lender could accommodate the gifted deposit while taking a pragmatic view of the client’s broader affordability position and recent account conduct.
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Use capital repayment over 29 years
The mortgage was structured at 90% loan-to-value with a five-year fixed rate, giving payment stability and a defined route to repaying the debt before age 70.
Interest-only borrowing could have reduced the monthly payment initially, but it would also have left the capital outstanding and required a separate repayment strategy. That did not align with the client’s preference for certainty, so a capital-repayment mortgage was the better fit.
A mortgage structured around affordability rather than headline income alone.
The lender’s affordability assessment supported the proposed borrowing after the client’s income, maintenance payments, commitments and household expenditure were considered together. The final structure was a 90% loan-to-value capital-repayment mortgage, fixed for five years over a 29-year term.
Keeping the renovation requirement separate avoided loading extra cost onto the purchase at a point when equity was limited. It also left that decision to be reviewed later, when the client’s property position and finances could be reassessed.
A gifted deposit can solve only one part of a purchase. Affordability, existing commitments, repayment structure and financial resilience still need to work together.
Protecting the income that supported the mortgage.
The client already had life insurance arranged in trust for the children, but there was no equivalent provision if illness or injury prevented them from working. With limited emergency savings and one main earned income supporting the household, Elizabeth recommended income protection.
The recommended policy was structured to provide a monthly benefit with cover continuing to age 70. The purpose was to create an income safety net if the client experienced an extended period away from work. Protection terms and availability remain subject to provider underwriting and the final policy terms.
The discussions also identified that the client did not have a valid Will. Elizabeth therefore arranged an introduction to a specialist adviser to discuss Wills, trusts and wider estate-planning considerations. That legal and estate-planning advice sits outside the mortgage recommendation itself.
Understanding this type of purchase.
Can a parent provide the deposit for a residential mortgage?
Many lenders can consider a gifted deposit from a parent, but the source of funds and the nature of the gift need to meet the lender’s requirements. The donor may need to confirm that the money is a genuine gift and provide supporting evidence.
Do loans, vehicle finance or overdraft use affect mortgage affordability?
They can. Lenders assess existing commitments and household expenditure alongside income, so the same salary can produce different borrowing outcomes depending on the wider financial position and the lender’s methodology.
Can renovation costs be added to a standard purchase mortgage?
Not automatically. The available route depends on the property value, loan-to-value, scale of works and lender criteria. In this case, the client chose to complete the purchase first and review renovation funding separately later.
Why consider income protection when taking a mortgage?
Where a household relies heavily on earned income, an extended absence from work can put pressure on mortgage payments and living costs. Income protection may provide a monthly benefit if the policy definition of incapacity is met, subject to underwriting and policy terms.
Buying with family support still needs a complete affordability plan.
If you are using a gifted deposit, managing existing commitments or thinking about protection alongside a home purchase, start with a review of the whole position rather than the deposit alone.
Understand your options before you commit. Your initial conversation, assessment and presentation of suitable options are free, with no obligation. Any fees are explained before you decide whether to proceed.
- 01 Explain the objective Tell us what you are buying, the broad deposit position and the borrowing you may need.
- 02 Review the whole budget Income, commitments, dependants, property and timing are assessed together.
- 03 See appropriate options We explain suitable routes and relevant costs before you decide whether to proceed.
Elizabeth Powell
Adviser at Willow Private FinanceElizabeth handled the advice in this anonymised case. New enquiries are coordinated through the Willow team so the right person can review your circumstances.
Enquire with the Willow team Or call 0207 082 5175Please keep your message brief and do not attach financial or identity documents.