Page 2 | AIBU to consider borrowing a house deposit from a friend temporarily?

Borrowingfromafriend · 2026-04-08T09:51:31+00:00

We’re looking to buy a property and need £200k for a deposit. I have quite a bit more than this in equity in another property however, this will take a while to be ‘freed’ up and I need to move ASAP if I want this property. A friend has suggested borrowing the £200k from her (she has a net worth of £50m+ just to put in perspective - this isn’t her entire life savings or anything). How would we go about this for a mortgage? Would it even be feasible? I would pay her back in full as soon as the other property sells.

Soontobe60 · 08/04/2026 18:33

Borrowingfromafriend · 08/04/2026 15:14

Seems a bit more complicated than I thought. I thought it would be as simple as her paying the money into my bank and signing to say that it’s a gift.
I wouldn’t want to inconvenience my friend if she would have to do more than this. She wouldn’t want legal letters etc drawn up, it would be an informal agreement.

Surely asking a friend for £200k at short notice is about as ‘inconvenient’ as it gets!
However, the friend would need to prove to your solicitor where this money has come from, will need to declare that it is a gift not a loan and that they will have no claim on the house.
Sometimes in life, we can’t have what we want when we want it.

Original poster

Borrowingfromafriend · 08/04/2026 18:28

titchy · 08/04/2026 17:35

They’re not tied up for a few months though. You could remortgage in a matter of days.

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I was told it would be 8 weeks.

OP posts:

titchy · 08/04/2026 17:35

Borrowingfromafriend · 08/04/2026 16:52

It really wouldn’t be like that. I have the funds to pay her - they are just tied up for a few months. She isn’t in any need of the cash any time soon and knows I wouldn’t mess her around.
We don’t actually speak super often, barely every week these days. It’s not like we’re at risk of falling out or anything (and of course I would still repay her even if we did!).

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They’re not tied up for a few months though. You could remortgage in a matter of days.

BudgetBuster · 08/04/2026 17:32

Do the have mortgage approval already @Borrowingfromafriend

Blacksheepsdsd · 08/04/2026 17:21

I don’t think it would necessarily be quicker than ‘a few days’.

I have never had a bridging loan so don’t know if that is actually true. But I also know moving large amounts of money can be challenging.

Your friend isn’t keeping her 50 million in an instant access current account. And if she was there are limits on payment amounts usually on these accounts.

Ljzjta · 08/04/2026 17:13

Batties · 08/04/2026 11:02

I’m not entirely sure that it would be legal.

Of course it’s legal. It can be treated as a gift. Gifts don’t solely come from parents.

Original poster

Borrowingfromafriend · 08/04/2026 16:52

Whatapantomime · 08/04/2026 15:57

I couldn’t get into a financial arrangement like this with a friend. There are too many things that could go wrong and could jeopardise the friendship.

It really wouldn’t be like that. I have the funds to pay her - they are just tied up for a few months. She isn’t in any need of the cash any time soon and knows I wouldn’t mess her around.
We don’t actually speak super often, barely every week these days. It’s not like we’re at risk of falling out or anything (and of course I would still repay her even if we did!).

OP posts:

Whatapantomime · 08/04/2026 15:57

I couldn’t get into a financial arrangement like this with a friend. There are too many things that could go wrong and could jeopardise the friendship.

SpottyDeckchair · 08/04/2026 15:45

Batties · 08/04/2026 11:02

I’m not entirely sure that it would be legal.

Never ruin a friendship by borrowing (or lending) money

2026Y · 08/04/2026 15:42

Borrowingfromafriend · 08/04/2026 15:14

Seems a bit more complicated than I thought. I thought it would be as simple as her paying the money into my bank and signing to say that it’s a gift.
I wouldn’t want to inconvenience my friend if she would have to do more than this. She wouldn’t want legal letters etc drawn up, it would be an informal agreement.

It might be as simple as that, but you need to check the gifting rules from the lender. She will also be subject to AML checks ie. she will have to prove the source of her funds.

2026Y · 08/04/2026 15:41

toomuchfaff · 08/04/2026 15:00

Won't a "gift" from the friend be classed as income and be subject to income tax?

No - gifts are not income, they are gifts!

Original poster

Borrowingfromafriend · 08/04/2026 15:14

Seems a bit more complicated than I thought. I thought it would be as simple as her paying the money into my bank and signing to say that it’s a gift.
I wouldn’t want to inconvenience my friend if she would have to do more than this. She wouldn’t want legal letters etc drawn up, it would be an informal agreement.

OP posts:

afaloren · 08/04/2026 15:10

You’ll need a gift letter from her I imagine as the bank may not accept it if it’s planned to be paid back.

Original poster

Borrowingfromafriend · 08/04/2026 15:08

Doseofreality · 08/04/2026 12:34

If your friend has a Net Worth of £50 million, does she not have access to financial advisors who can tell her if that is feasible for you?

I wouldn’t really want to inconvenience her by putting that on her.

OP posts:

toomuchfaff · 08/04/2026 15:00

Won't a "gift" from the friend be classed as income and be subject to income tax?

mynameiscalypso · 08/04/2026 13:29

We did this (except we borrowed from family rather than a friend). We had a simple loan agreement, including terms for interest on the loan, drawn up. We were clear on the source of the deposit and that it was a loan and had no problem getting a standard mortgage with a high street bank. I don’t think they asked any questions at all. It may have helped that we only needed a mortgage for about 30% of the property value so we weren’t pushing it on affordability at all and we had a clear plan for repayment (selling our existing property).

Claudiasfringebenefits · 08/04/2026 13:26

Friend would have to sign legal paperwork to say this a gift, no stake in house and no intention for you to pay them back, they would need to be scrutinised as to the source of the money/ ID checks and the bank may or may not accept.

Would have to be a very good and very trusting friend to do this process. And you will have limited lenders.

2026Y · 08/04/2026 13:24

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2026Y · 08/04/2026 13:24

The Issue you will have is that gifts from non family members are viewed with scepticism. Your friend would need to declare it’s a gift (which it’s not) and even if they did that, some lenders would be concerned that it’s actually a loan. Speak to a broker - they will understand the ‘gifting’ rules for the different lenders but I think you might struggle.

2026Y · 08/04/2026 13:24

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2026Y · 08/04/2026 13:24

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2026Y · 08/04/2026 13:24

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2026Y · 08/04/2026 13:24

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KnickerlessParsons · 08/04/2026 13:22

The loan provider will take the monthly repayments to your friend out of your disposable income, so it may affect the amount you can borrow - this would apply to any loan, not just one between friends.

What would happen if you died, lost your job, or were otherwise unable to pay off the loan from your friend?

If your deposit is £200k, the house you are buying must be £££ - if you did die, would your friend have a legitimate claim for her money to be returned by selling the house? And if the value of the house were to drop, so that most of the value would be in the £200k with not much left over, what would this mean for any dependants or beneficiaries?

What would happen if the house burned down?

What would happen if you and the friend fell out?

Would your friend be looking at this as an investment and expect the loan to be returned with interest, or as a proportion of the value of the house if the house increases in value?

I could go on, but in summary, it's really not a good idea.

Agrumpyknitter · 08/04/2026 13:17

I would take it and be grateful you have such a lovely friend. If you draw up a loan agreement then see if she would be willing to extend the loan repayment to 18 months instead of a year if there could be a problem getting the property sold. It will give you some extra breathing room and if you sell quickly you can repay early. Just in case buyers pull out etc. a loan agreement will
protect the friendship too as you will both know where you stand.