You are usually required to show at least 5% of the property value in genuine savings to qualify for a home loan.
This applies specially when you are borrowing up to 80% or more of the property value. What this means is that the money which amounts to 5% of the purchase price must have been held in your savings account for a specified period, usually 3 months.
There are some lenders who may be willing to accept the weekly rent you pay as genuine savings. In addition, there are other types of genuine savings acceptable to one of our lenders such as cash from the sale of your car, an inheritance, or a bonus from work if you have been renting for at least three months.
Please note that there are certain criteria for the lenders to accept rent as genuine savings.
- You must have a rental history of at least three months (previously 12 months).
- Your rental repayments should be at least 50% of the proposed home loan repayments.
- You must be paying your rent and your bills on time.
- You must be renting via a licensed real estate agent.
- You still need 5% as a deposit, it just doesn’t need to be saved over a three month period. It can come from a gift, inheritance, cash, shares, bonus from work, term deposit or equity in another property.
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