If you can prove a strong rental payment history, some lenders will make an exception to their normal genuine savings policy. You generally need to meet the following criteria:

• You’re currently renting.
• Most lenders prefer a minimum of 12 months of rental history but some lenders will consider three months of rent paid on time, every time.
• You are renting privately or via a licensed property manager (private rentals are case by case).
• The tenants on the lease must be the same as the borrowers on the home loan application.

If you meet the above criteria, the rent you paid over the last three months will be considered in lieu of genuine savings with one of our lenders. We’ll need your property manager to complete a rental reference letter (we can provide the template) and/or a tenant ledger to assess your home loan. For more on this, read our page on ‘Rent As Genuine Savings’.

Is It Really That Easy For Renters?

Not necessarily. Banks are stricter in their assessment if there isn’t standard genuine savings in a bank account. Only a select few lenders make exceptions to genuine savings criteria for renters. The banks sometimes have very conservative credit scoring for those using rent as genuine savings. Most banks won’t accept a private lease or a lease from a family member. Some banks will complete a ‘capacity test’ or will require that you have 1% to 2% genuine savings. Your rent may be considered as genuine savings, but you’ll still need to come up with a deposit to complete the purchase.

Other No Genuine Savings Options

The following deposit types can be considered as genuine savings but you must be able to prove that your rental payments have been made on time for a minimum of three months:

• Gift: The gift must be in your account and a gift letter must be provided by your parents to confirm that the gift isn’t a loan.
• Bonus/Dividend/Commission payment: Provide a payslip evidencing payment and bank account statements.
• Inheritance: Provide a letter from the executor confirming the amount and date that the funds will be received.
• Non-real estate asset sale: Provide evidence 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.

Do I Still Need A Deposit For A No Genuine Savings Home Loan?

Yes, you’ll still be required to provide a deposit or what the banks call “funds to complete”. You’ll need to prove these funds at the time of your initial loan application. The amount required would ordinarily be a minimum of 5% of the purchase price (depending on the LVR of your loan). This percentage varies depending on the state in which you’re purchasing and whether or not you’re a first-home buyer as grants and stamp duty exemptions need to be considered. If you don’t have a deposit but you have a guarantor, we can lend you the full purchase price plus costs!

What Other Restrictions Apply?

To get approved with a lender that doesn’t require genuine savings, certain restrictions may apply. As a general rule:

• No genuine savings home loans are usually available only for buying a home to live in, not for investment.
• Not available when purchasing vacant land or constructing.
• Max land size with most lenders is 2.2ha.
• Properties in small towns or remote areas may not be considered.
• The ratio of your net disposable income to your total debts should be at least 110%.
• You’ll be able to borrow only up to 95% of the property value up to $650,000 as opposed to $1 million if you had genuine savings.

Don’t meet the above requirements?

📞 Call 1800 NO RIBA (667 422) or Apply Online Now!