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Rent As Genuine Savings

Why not let your rental history work for you?

Trying to get out of the rental rate race and into the property market can be really tough when you need to save a 5% deposit just to qualify for a home loan.

By choosing a lender that accepts rent as genuine savings, you can actually prove your ability or “capacity” to make mortgage repayments with your rental repayments instead of your own regular savings.

You still need a deposit but the great thing is that you can actually use other deposit sources such as a gifted deposit from your parents, inheritance or sales proceeds from a non-real estate asset.

How much can I borrow?

The maximum amount you can borrow or the Loan to Value Ratio (LVR) will vary depending on how long you’ve been renting.

As a general rule:

  • 12 months rental history: Borrow up to 97% of the purchase price (LVR) inclusive of Lenders Mortgage Insurance (LMI).
  • 6 months rental history: Borrow up to 95% LVR.
  • 3 months rental history: A policy exception that allows you to borrow up to 95% LVR.

Call us 1300 889 743 or complete our free assessment form and we can let you know if you qualify for a rent as genuine savings home loan.

How does it work?

Some lenders will accept rent in lieu of genuine savings because your ability to pay rent on a fortnightly or monthly basis is reflective of your ability to meet your mortgage repayments.

In fact, it’s fair to say that when property prices are high, particularly in metro locations, you may well be paying more in rent than you would be in mortgage repayments on a typical loan amount.

This is the reason why some lenders are willing to accept this form of genuine savings.

How do I qualify?

Rental ledger from your real estate agent

In order to qualify for a rent as genuine savings mortgage, you need to show with a rental ledger from a licenced real estate agent that shows you’ve been making your rental repayments in full and on time for at least 12, 6 or even 3 months.

You can find a rent ledger or rental reference letter template on our website which you can provide to your property manager to complete.

A 5% deposit

As long as you can show that you’ve been paying rent on time and in full for a minimum of 3 months, some lenders will accept the following as part of your deposit:

  • Gifted deposit from your parents: The gift needs to be in your account and you need to also provide a signed gift letter from parents explaining that the gift is non-refundable.
  • Bonus/dividend/commission income: All you need to provide is a payslip and bank statement evidencing the payment/s.
  • Inheritance: Provide a letter from the Executor confirming the amount and date that the funds will be received.
  • Sale of a non-real estate asset: This can include the sale of car, furniture, artwork or other items. You just need to provide evidence confirming the details of the asset that you sold.
  • Tax Refund: Simply provide a copy of your Notice of Assessment showing the tax refund amount.
  • First Home Owners Grant (FHOG): As long as you qualify for FHOG in your state, banks will accept this as part of your deposit.
  • Personal loan: This is a policy exception with some lenders.

Strong financial position

That means your credit file should be clear of defaults, you need stable employment, and any unsecured debt such as credit cards or personal loans should be minimal.

What if I’m renting privately?

All other lenders require that you to have been renting via a licensed real estate agent but there is an exception to this requirement.

If you’ve been renting for more than six months, have a formal, legally binding tenancy agreement in place and can prove your rental payments with bank statements, we can help you to get approved.

Call us on 1300 889 743 or fill in our free assessment form today.

What if I’m renting with other tenants?

The lease should be in your name alone or both you and your partner. You may still qualify if you are renting with other people, as long as you can prove a track record of prompt rental payments with your bank account statements and your name is listed on the tenancy agreement.

Do the rental payments need to match the minimum deposit requirement?

No. Banks won’t be looking at your complete rental history and adding your rental payments up to see if they equal 5% of the loan amount you’re borrowing.

Does rent need to match the proposed mortgage repayments?

Not necessarily. Although there isn’t specific policy around this, some lenders may require that the current amount that you’re paying in rent is somewhat “comparable” to your fortnightly or monthly mortgage repayments.

This has more to do with your “capacity” or ability to afford the mortgage and banks may place more scrutiny on this if your application is tight in other areas such as your income or employment status.

Again, this isn’t strict policy so it’s best to speak to one of our mortgage brokers so we can properly assess your overall financial situation and select the lender that’s right for you.

Are there other non-genuine savings solutions?

Whether you’re currently renting or not, you can avoid the genuine savings requirement by asking your parents to provide you with a gift or by asking them to act as guarantor for your home loan.

With a guarantor, not only to avoid the genuine savings requirement but:

  • You don’t need a deposit.
  • You can borrow up to 100% plus the costs of completing the purchase including solicitors fees and stamp duty.
  • You can avoid LMI which can literally cost you thousands of dollars upfront.
  • You can get same interest rates as if you were applying with a 5% deposit.

Do you need a rent as genuine savings home loan?

Our mortgage brokers are specialists in non genuine savings and no deposit home loans!

Discover if you qualify for a rent as genuine savings home loan by calling 1300 889 743 or by filling out our online enquiry form today.

  • B Hayden

    Hi, I can provide a 3 months rental history and want to borrow 95% using that. It is stated that there’s a policy exception that can allow me to do that. Can I learn more of that?

  • Hello B Hayden, the policy exception is dependent on a number of factors related to your situation and loan needs so please call us on 1300 889 743 to find out whether or not you qualify for the exception.

  • Shaz

    Hi,
    I’m low income $17,000 from work and $36,000 from child support a year. I have $7,000 saved and 6 months rental history at $340 a week. No credit cards or other loans, but $1000 phone bill in collection that I’m paying on my credit file. Can I get a 95% home loan?

  • Hi Shaz,

    The phone bill will be a problem for a lot of lenders. If you can get this removed from your credit file then this give you more options for lenders. You can contact a credit repair company for assistance with this.

    The rental history is great and will really help. The size of your deposit is the main problem. Also some lenders do not accept child support income https://www.homeloanexperts.com.au/unusual-employment-loans/child-support-home-loan/

    I’d recommend that you try to save a 5% deposit or get a guarantor to assist you and then you should be eligible https://www.homeloanexperts.com.au/guarantor-home-loans/

  • Jo

    Hi – my husband and I have been renting for several years, currently paying $550 a week. Have never missed a payment etc. We have only $5000 in savings. Our combined income is around $100K a year. Any chance of us getting approved for a loan?

  • Hi Jo,
    The best option is a guarantor loan as then you’ll pay no LMI and you don’t need a deposit https://www.homeloanexperts.com.au/guarantor-home-loans
    If your parents are unable to go guarantor then the next best option is for you to get a personal loan to top up your deposit https://www.homeloanexperts.com.au/genuine-savings/personal-loan-deposit/
    This works well if you have a high income and few debts. So depending on the amount you would like to buy a home for this may work for you. Your rental history will help us to show that you’re a good borrower and will repay the home loan. In states like QLD where there is a large first home grant this is a good option.
    Otherwise the only option left is to continue to save.

  • Simon

    Hi,

    I earn around 100k per year as I’m on salary and commission and my wife is on 20k per year as we have young children. We have $10,000 in saving and a investment property worth around $360k with $300k owing on the property. We are also first home buyers. We have been renting for 4 years at our current address $490 p/w. We have no other debts, cars are both paid in full. Any suggestions as I would like look at properties around $600k if we can borrow that much, cheers

  • Hi Simon,

    Please input your info as well as a few more additional details into our serviceability calculator for an accurate estimation of how much you can borrow. You’ll also find a few tips and additional info that can help. Here’s the link to the calculator:
    https://www.homeloanexperts.com.au/how-much-can-i-borrow/

    If there’s anything more you’d like to know or discuss then you can enquire online directly through the page or call 1300 889 743.

  • Ben Bowles

    Hi I just wanted some advice I’m looking at buying or building my first home. I can prove paying rent for at least the last 5 years always on time. I earn around $120000 a year as a casual but I’ve been in the same job for over 8 years. My partner earns around $24000 a year. I have a personal loan of $20000 out that I pay $168 a week and car loan of around $45000 left that I pay $300 a week. What I want to know is would it be possible to combine my loans into a mortgage and use my rental history as genuine savings. I could probably come up with a $20000 deposit by selling 1 of my cars. Thanks

  • Hi Ben,
    You’ve got an option of either getting a guarantor loan (best option by far) https://www.homeloanexperts.com.au/guarantor-home-loans
    Or you can sell your car and use this as a deposit. The $20,000 may not be sufficient however that depends on the state that you live in and if you are eligible for first home benefits. If you’re in QLD (which has high grants) and you buy a new home then this would be ok depending on the amount that you’re buying a place for. We’d also recommend that you save as much as possible from here on in.
    Your credit score would be reduced due to the amount of personal debt you have but it is likely that it would be high enough to qualify. https://www.homeloanexperts.com.au/credit-score-home-loan/

  • Ben Bowles

    Thanks for the quick response I’m looking at buying or building in country Victoria for around $350000 to $400000 hopefully they rule that we can draw off our super. Thanks for your time

  • Hi Ben,
    I’d say you’d be right on the border with $20,000 as a deposit AND if you purchased a new home which would mean you get a $10,000 grant.
    If I were you I’d go for saving another $5k to $10k OR talking to your parents about going guarantor.
    It looks like the super accessibility is not on the table any more. We can only hope they review it in the future.

  • Jordan

    Hi,
    Myself and partner have a combined income of $110k per year.
    We currently have debt of around 35k for car and small personal loan. We rent which is $330 per week and have $16k of savings.
    Would we be eligible for 95% loan, if not how much would you recommend to have in savings or could someone gift us another 10k and that be enough?

  • Hi Jordan
    Yes you likely would be eligible for a 95% loan. Your deposit is the main concern so increasing it’s size will help a lot. Considering you’ve saved part of the deposit yourself it’s likely you can qualify for a 95% loan using rent as genuine savings.
    Please contact us if you’d like our mortgage brokers to help you to get approved https://www.homeloanexperts.com.au/free-quote/

  • Sarah O’Brien

    Hi,

    Just looking for a bit of hope. A combined income with my husband of around 120k annually, eligible for FHBG and around 30k saved. No debt and perfect rental history of $560 weekly for around 5 years. What would be our chances?

  • Helen

    Hi my partner and I earn a combined 100k combined and have $20k worth of credit&personal loan debt. We rent at 340pw for the last 14 months. We have $4k in savings. Are there any home loans we would qualify using rent as genuine savings and not having to ask our parents for help (guarantor)?

  • Hi Helen,
    Guarantor is definitely the best option for you, otherwise your maximum purchase price would be very limited. Even in VIC and QLD which have high first home owners grants you’d need a guarantor or to save more of a deposit. https://www.homeloanexperts.com.au/guarantor-home-loans

  • Helen

    If we were to pay off our debts and aim to save 5 per cent of the purchase price would this allow us to borrow without a guarantor?

  • Yes, if you paid off most of your debt (say to $10,000) and saved a 5% deposit in a bank account then you’d qualify for a 95% loan https://www.homeloanexperts.com.au/no-deposit-home-loans/95-percent-home-loan/

  • Helen

    Are there still banks that accept rent as part of genuine savings also?

  • Yes there are. However you still need a deposit. It just means that a gift or sale of your car etc is an acceptable deposit source rather than your own savings.