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, a bonus from work, has been borrowed or comes from some other source that banks do not consider to be regular savings, then you can get what is known as a “non genuine savings” loan.
How much can I borrow?
You must meet standard lending criteria involving your employment, credit history, serviceability and proof of your 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: One of our lenders can approve a home loan for up to 95% of the purchase price with no genuine savings.
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 do not consider a gift to be the same as a deposit that you have saved yourself. This is because a saved deposit is excellent evidence that you are financially responsible and are able to make repayments on a home loan.
If your deposit is coming from a gift then please call us on 1300 889 743 as the approval criteria is more complicated than 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 however cannot prove to a lender that they have 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 requirements.
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 have 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.
- If you are currently renting, then some lenders will consider the rent you have paid in the last 12 months as genuine savings (conditions apply, 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 sale of motor vehicles.
- Windfall gains.
- One-off government payments (e.g. tax refund).
It’s actually very complicated… Some lenders accept these deposit sources as genuine savings if you are currently renting!
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?
No, if you are 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 those 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 are borrowing 85% of the property value or less then generally there is no difference in loan and LMI pricing with any lender.
Can I get a 95% home loan without genuine savings?
Recently some lenders have begun to offer 95% home loans without any proof of savings. This type of loan is only available to people who are in a strong financial position. To qualify for this loan you must meet the following guidelines:
- You must be paying your rent on time (if you are 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. You are not allowed to borrow to your limit.
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 being is that the other two lenders do not capitalise the LMI premium on top of the loan amount.
For example if you borrow 95% then the LMI premium will be around 3% of the loan amount. If your lender doesn’t add this onto the loan then you will only get 92% of the property value after the premium has been paid! This means that for a $500,000 purchase you would need to find another $15,000 to complete the purchase!
Whereas if the premium is capitalised, then the lender approves your loan for 98% of the property value, which leaves you with 95% after the LMI premium is paid. The above calculation is an example only. Please use our purchasing costs calculator and LMI calculator to work out how large your deposit will need to be to buy a property.
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 have not increased or why there was a large lump sum deposited into your account.
In most cases there is no need to pretend that you saved your deposit yourself because there is 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 are 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.