The options available to help a child buy their first home

There are many options available for parents looking to help their children onto the property ladder.

UK property prices have skyrocketed in recent years, which is why so many parents have made moves to help their children buy their first home.

By helping your child onto the property ladder now, they can potentially benefit from future property price rises, and won’t have to waste their money on rent.

What’s more, if you’re gifting money to them now, you could reduce your future inheritance tax bill (provided you live for seven years after making the gift).

If you don’t want to gift them money towards a property purchase, there are plenty more ways you can help them.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

What options are available to help my child onto the property ladder?

  • Gifted deposit. By gifting your children money towards a deposit, you can potentially help them get on the property ladder quicker or secure a mortgage with a lower loan-to-value ratio. These mortgages tend to have more favourable rates. The mortgage lender will want to see written proof that the donation is a gift, not a loan. If the children are being made to pay the funds back, it could harm their application.
  • Equity release. This involves exchanging the equity in your home for a cash lump sum. Parents may choose to do this to fund the purchase of their child’s home. Although it’s a quick way to get your hands on a lot of money, it can prove expensive in the long run. See our guide for an explanation of how the two types of equity release work.
  • Guarantor mortgages. By naming yourself as a guarantor on your child’s mortgage, you can boost their odds of being approved for a great deal. Lenders feel more comfortable approving first-time buyers with this extra layer of security against mortgage arrears. Bear in mind that lenders will perform a financial assessment to ensure you have the funds available to be a guarantor, and that you’ll be responsible for your child’s mortgage repayments if they fall behind on them.
  • Joint mortgages. With a joint mortgage, the annual income of both applicants are considered jointly. You can therefore boost your child’s borrowing power by applying for a mortgage jointly with them. You’re free to make your own arrangements for how the mortgage should be repaid, but be aware that you’ll be jointly responsible for the debt in the eyes of a mortgage lender. You’ll also have to agree on when to sell the property.
  • Offset mortgages. With this product, you can link a savings account to your mortgage and use the funds within it to reduce the interest you’ll pay. If your child has a £100,000 mortgage with £60,000 stored in a savings account, they’d only pay interest on the remaining £40,000. Best of all, they’re free to withdraw money from the account whenever they want. As such, parents can reduce their child’s mortgage payments without spending a penny, by transferring savings into this account.

Can I transfer a property to my child?

You can transfer a property to your children at any time, even if you still live in it. There may be legal fees involved though.

What’s more, you’ll still pay inheritance tax on the property if you die less than seven years before making the gift. If it’s a second home or holiday home, you’ll also be liable to pay capital gains tax on any increases in the home’s value. Learn more about capital gains tax.

Can I put my child’s name on the property deeds?

Co-owning a property with your child is possible, but there are risks involved.

  • You’ll pay legal fees to change the deeds.
  • You won’t be able to sell the property without their permission.
  • If your child falls into serious debt, creditors could come after their share in the property.
  • If your child gets divorced, their ex-spouse could have a right to their share of their property.
  • Their capital gains tax bill will be based on what you originally paid for the property, rather than its value when inheriting it from you after you die. This essentially means they’re missing out on the “step up” law.

Speak to a legal expert for a full summary of the pros and cons of adding your children to the property deeds.

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

More guides on Finder

  • Mortgage statistics: The average UK mortgage size, payments and debt

    From the average house price to how many outstanding mortgages there are, we explore all the latest mortgage statistics in the UK.

  • Finder Lending Innovation Awards 2022

    These awards recognise innovation in the areas of credit cards, loans, mortgages and BNPL. We reveal this year’s winners.

  • Lending Innovation Awards 2021

    These awards recognise innovation in the areas of credit cards, loans, mortgages and BNPL. We reveal this year’s winners.

  • Agricultural mortgage

    What you need to know about getting a mortgage if you’re buying or refinancing a farm or farmland, including the factors lenders consider when you apply for one.

  • Mortgage for a pub

    Everything you need to know about taking out a mortgage to buy or refinance a pub. Find out where to get one, how to get the best deal and the factors lenders consider.

  • Mortgage for a hotel

    In-depth guide to taking out a commercial mortgage to buy or refinance a hotel. Find out how to get the best rates, factors lenders consider and what you need to apply.

  • Bridging loan vs commercial mortgage

    Find out if a bridging loan or commercial mortgage would suit you if you’re buying or refinancing commercial property and when a bridging loan can be a better option.

  • How much deposit do I need for a commercial mortgage?

    Find out how much deposit you need if you’re taking out a commercial mortgage, including the factors lenders take into account, and how to get the best deal for you.

  • Getting a 5% deposit mortgage under the government’s new guarantee scheme

    Learn more about the new government scheme that allows first-time buyers and home movers to get on the property ladder.

  • Chain break finance

    Learn everything you need to know about chain break finance – a type of bridging loan that stops you losing your dream home if the sale of your existing one falls through.

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site