Finally! Home loans without any genuine savings
The majority of Australian lenders require you to prove that you have saved a 5% deposit before they will approve your home loan.
If your deposit is a gift from your family, comes from the sale of an asset, is a bonus from work, has been borrowed or comes from a source other than savings, you may be knocked back for a mortgage!
Luckily, there are some lenders that offer “non genuine savings” loan.
How much can I borrow?
You must meet standard lending criteria involving your employment, credit history, serviceability and proof of income.
The amount you can borrow depends on your overall situation:
- 90% home loans: You can borrow 90% of the purchase price from three of our lenders irrespective of the source of your deposit.
- 95% home loans: Most lenders can approve a home loan for up to 95% of the purchase price with no genuine savings (specific conditions apply).
- 100% home loans: With a guarantor, you can borrow 100% of the purchase price plus the costs of completion.
Call us on 1300 889 743 or enquire online and one of our mortgage brokers will help you to get approved.
Can lenders accept a gift as a deposit?
Yes, you can get approved for a home loan if your deposit is coming from a gift from your parents, however, not with all lenders.
Banks don’t consider a gift to be the same as a deposit that you’ve saved yourself.
This is because a saved deposit is excellent evidence that you’re financially responsible and able to make repayments on a home loan.
If your deposit is coming from a gift, please call us on 1300 889 743 because the approval criteria is more complicated than it is for a standard home loan.
No deposit or no savings?
Borrowing 100% of the purchase price with no deposit is only available if you have a guarantor that can support your application.
100% home loans without a guarantor are no longer available from any lender in Australia.
This page is written for people that have a 5% or 10% deposit but can’t prove to a lender that they’ve saved this deposit themselves with regular contributions to a savings account.
In most cases, our customers’ parents have helped them by lending them the deposit or giving them a gift as the deposit.
Read on to find out the lending guidelines for 90% and 95% home loans without savings.
How do I know if my deposit is 'genuine savings'?
You can apply for a genuine savings loan if you have a 5% deposit that is coming from one of these sources:
- Money that has been held in a savings account for 3 to 6 months (depending on the lender).
- Money that you’ve saved over the last 3 months.
- Money held in a term deposit for over 3 months.
- Equity in an existing property (some lenders only).
- Proceeds from the sale of a property (some lenders only).
- Shares held for over 3 months.
- Some lenders will consider your last 12 months’ rent as genuine savings if you’re currently renting (conditions apply; available with three lenders only).
You can apply for a no genuine savings loan if your deposit is coming from one of these sources:
- A gift from a family member (we have gift letter templates available).
- First Home Owners Grant (FHOG).
- Advances on wages/commission from an employer.
- Financing of a deposit (personal loan or other borrowings).
- Builder discount/finance (restrictions apply).
- Vendor discount/finance (restrictions apply).
- Proceeds from the sale of a property or a motor vehicle.
- Windfall gains.
- One-off government payments (e.g. tax refund).
It’s all very complicated!
Call us on 1300 889 743 or enquire online to speak to a specialist mortgage broker about your situation.
Are non genuine savings loans more expensive?
If you’re borrowing up to 90% of the purchase price then the majority of lenders have the same rates and fees for their no savings home loans as they do for people that have saved a deposit.
For loans of up to 95% of the purchase price, some lenders will charge a slightly higher Lenders Mortgage Insurance (LMI) premium if you can’t prove genuine savings.
If you’re borrowing 85% of the property value or less then generally, there’s no difference in rates or LMI pricing with any lender.
Can I get a 95% home loan without genuine savings?
Recently, some lenders have started offering 95% home loans without requiring any proof of savings from the applicant.
This type of loan is only available to people who are in a strong financial position, namely you must be able to afford all of your debts at a loaded interest rate and living expenses and have a 10% buffer left over.
To qualify for this loan, you must meet the following guidelines:
- You must be paying your rent on time (if you’re renting).
- Both applicants must have stable employment.
- Your credit history must be free of any defaults or adverse listings and must not have too many credit enquiries.
- You must have an excellent credit score.
- You must not have too many consumer debts such as credit cards and personal loans.
- You must be able to afford the debt comfortably but note that you’re not allowed to borrow to your limit.
The following exclusions also apply:
- Purchase or construction of an investment property
- Vacant land
- Properties exceeding 2.2 hectares
- Refinancing an existing mortgage
- Debt consolidation
- Equity release (cash out)
- Borrowed funds such as personal loans, credit cards or loans from family (gifts are acceptable)
- Australian expats do not qualify but do qualify for the same interest rates as Australian citizens
- Line of Credit is not available
Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will let you know if you qualify for a mortgage.
Ask your lender if the LMI premium is capitalised!
Did you know that although there are three lenders that have 95% home loans with no genuine savings, we only recommend one of those lenders?
The reason is that the other two lenders don’t capitalise the LMI premium on top of the loan amount.
What’s the benefit of capitalising LMI?
If you borrow 95%, the LMI premium will be around 3% of the loan amount.
If your lender doesn’t add this onto the loan then you’ll only receive 92% of the property value after the premium has been paid!
This means that for a $500,000 purchase, you’d need to find another $15,000 to complete the purchase!
If the premium is capitalised, then the lender will approve your home loan for 98% of the property value, leaving you with 95% after the LMI premium is paid.
The above calculation is an example only.
Can I hold a gift in my account?
Some people try to hold a gift in their account for several months to have it counted as genuine savings.
Unfortunately, it isn’t always this simple.
While this will convince some lenders that you are good with your money, there are others who will question why your savings haven’t increased or why there was a large lump sum deposited into your account.
In most cases, there’s no need to pretend that you saved your deposit yourself because there’s a lender that will approve your loan anyway.
The key is to apply with a lender that can accept your situation.
Apply for a loan without proving any savings
We’re experts in the genuine savings policies adopted by all of the major Australian lenders and know who can approve a loan without any genuine savings.
Please call us on 1300 889 743 or enquire online to speak to a specialist mortgage broker who can find you a loan without the need to show genuine savings.