How much genuine savings do I need?

Any general questions you might have in regards to loans and finance.
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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: How much genuine savings do I need?

Post by Otto Dargan »

Hi Mikasa,

Home buyers are usually required to have a genuine savings of a minimum of 5% of the purchase price.

The Genuine Savings Calculator will help you find out how much genuine savings you may need for your loan.The calculator assesses how your deposit will be viewed by the banks and whether or not you will be able to meet their requirements.

You may need genuine savings of at least $22,500 in order to purchase a house worth $550,000. You can accurately estimate genuine savings in different situations with this calculator. Please note that it should only be used as a guide.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How much genuine savings do I need?

Post by Otto Dargan »

Hi Mikasa,

There are a few lenders that will accept a rental payment history in lieu of savings. Below are the qualifying criteria:
  • 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.
However, in some cases your 5% deposit will still need to be held in your account for at least three months even though you have a three month rental history.

Rent as genuine savings is now accepted by more lenders. This is because Genworth is more accepting of it. Genworth insures many of Australia's banks so they pretty much set how risky the bank can be with their lending policies).
Some lenders and LMI providers won't accept rent as genuine savings but they will give a reduced LMI premium for a non-genuine savings loan
Many lenders now only require genuine savings at 90% LVR. Previously it was 85% for most lenders.

If you are a first home buyer, then you may get a First Home Owners Grant (FHOG) which is a one-off grant designed to help first time home buyers enter the property market. This is funded by the federal government and managed by the state governments.

Please note that the grant is only payable to those who meet certain criteria such as:
  • All applicants must be a real person, not a company or a trust.
  • All applicants must be at least 18 years of age.
  • At least one applicant must be an Australian citizen (or NZ citizen), or a Permanent Resident (PR).
There are more eligibility criteria to FHOG, which you may find on our website.

Please call us on 1300 889 743 or enquire online and one of our mortgage brokers can determine which lenders you will qualify with.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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