Mortgage Notes

Mortgage question

Do I have to prove where my mortgage deposit came from?

A person signing conveyancing paperwork with bank statements on the desk

Yes — under UK anti-money-laundering law (POCA 2002 and the Money Laundering Regulations 2017), both your lender and your conveyancer must evidence every pound of deposit, and in 2026 solicitors typically request 3–6 months of bank statements plus written proof for any single credit above roughly £500–£1,000.

Why is the solicitor asking for so much?

Because the law tells them to, and the fines for getting it wrong are existential. Two statutes sit behind every “source of funds” request. The Proceeds of Crime Act 2002 (POCA) makes it a criminal offence for a regulated firm to handle money linked to crime. The Money Laundering Regulations 2017 (MLR) then tell solicitors and lenders exactly how to check — who their client is, where the cash came from (source of funds), and how that wealth was built up over time (source of wealth, a separate check for larger sums).

A conveyancer who releases deposit money without evidencing it can face personal liability, firm-level fines up to £1 million from the Solicitors Regulation Authority, and in serious cases a 14-year custodial sentence under POCA. That’s why the questioning can feel disproportionate to a clean £3,000 ISA transfer — the solicitor isn’t judging you, they’re papering the file.

What exactly do they ask for?

Most UK firms in 2026 run a two-step document request:

  1. Source of funds — where the actual money sitting in your deposit account came from. Typical evidence: 3–6 months of statements for every account feeding the deposit, plus screenshots or PDFs of ISA balances.
  2. Source of wealth — how you accumulated it in the first place. Evidence: payslips, P60s, self-assessment returns, investment statements, or a written explanation for one-off windfalls (inheritance, divorce settlement, business sale).
A solicitor reviewing bank statements and a deed of gift letter with a client
Conveyancers must evidence both source of funds and source of wealth — two separate checks under the 2017 Regulations.

Anything over roughly £500–£1,000 landing in your account as a single credit will normally be queried. A regular salary of £3,200 is fine — it matches your payslips. A one-off £3,200 from a friend is not fine until you can show where they got it.

What about a gifted deposit from parents?

Gifts are completely legal but need a specific paper trail. You’ll be asked for a signed deed of gift letter from the donor confirming the money is a non-repayable gift and they have no interest in the property, plus the donor’s own proof of funds — typically 3 months of their bank statements and, if the gift is sizeable, a source-of-wealth explanation (savings from salary, sale of previous home, inheritance). The sharpest delays come when donors are reluctant to share their statements; budget time for that conversation early. Our guide on gifted deposits and proof of source has a template checklist.

Which sources trigger enhanced checks?

Four types of funds almost always escalate to enhanced due diligence and can add 2–4 weeks to completion:

  • Crypto proceeds — you’ll need exchange statements showing the full chain from fiat in to fiat out, plus original source of the money that bought the crypto.
  • Cash deposits — any physical cash paid into your account within the last 6 months is scrutinised; “birthday money” adding up to thousands is the classic red flag.
  • Gambling winnings — receipts or statements from the operator showing the specific wins, not just the withdrawal.
  • Overseas transfers — SWIFT confirmations plus a plausible source-of-wealth narrative; transfers from jurisdictions on the UK high-risk list (updated quarterly by HM Treasury) can stop a deal dead.

The common misconception

Many buyers think the check happens once and then they’re done. It doesn’t — it runs continuously. Conveyancers can and do re-query funds that shift between exchange and completion, and lenders can pull a mortgage offer if new information surfaces late. Practical rule: once you’ve declared your deposit accounts, leave them alone. Don’t move funds between accounts for “tidiness,” don’t accept a big birthday transfer into your deposit pot, and don’t dip into savings for a holiday you’ll replace later. The less movement between offer and completion, the smoother the final AML check.

This is information, not regulated advice. For a view tailored to your circumstances, speak to your conveyancer at the earliest stage.

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Information, not regulated advice. Mortgage Notes is not an FCA-authorised mortgage adviser. For a recommendation on your specific circumstances, speak to an FCA-authorised broker.