Generally, if you are borrowing more than 85 per cent of the value of the property, you would need to show 5 per cent of the purchase price in genuine savings.
The following savings are considered as genuine savings if they add up to be more than 5 per cent of the purchase price.
- Savings held or accumulated over 3 months.
- Term deposits held for 3 months.
- Shares or managed funds held for 3 months.
- Equity in real estate
What if I do not have 5 per cent genuine savings
If your parents’ property is unencumbered or they are having a small loan owing, using your parents as guarantors will help you to purchase the property with no deposit. Hence, you are not required to provide evidence of genuine savings.
Please refer to section No Deposit Home Loan for more details.
Also, a handful of lenders will waive the condition of genuine savings if you have been renting for the last 3 months via an agent. Refer to section: Rent As Genuine Savings
One of our lenders can approve the loan at 95 per cent without genuine savings. This will require applicants to have strong employment history, minimum personal debts such as credit card, personal loans.
Also, some lenders will offer loans at 90 per cent without genuine savings with some conditions applied.
Rent as Genuine Savings
If you have been renting through an agent and making the rental payment on time for a minimum of three months. Some of our lenders will waive the requirement for genuine savings if you need to borrow at 85 per cent or more. This means the deposit to complete the purchase can come from any sources such as:
- Gift: The gift must be in your account and a gift letter must be provided by your parents to confirm that the gift is not a loan.
- Bonus/Dividend/Commission payment: Provide a pay slip evidencing payment & bank account statements.
- Inheritance: Credit to personal bank account and a letter from the Executor confirming the amount and date that the funds will be received.
- Non-real estate asset sale: Credit to personal bank account with a letter from you confirming the details of the asset that you sold. In most cases this is from the sale of a motor vehicle.
- Tax Refunds: Provide a copy of your Notice of Assessment.