Cash and coins

Get a home loan without genuine savings

If you’ve been lucky enough to come into some money, there could be home loan options out there for you right now.

Gifts from your parents

Many lenders will accept a gift from your parents as part of your deposit, so long as you've saved at least 5-10% yourself. Your lender will usually require your parents to sign a statutory declaration that the money is a gift, and is not refundable.

Genuine savings explained

Any first time home buyer knows that one of the biggest barriers to buying a home is saving a deposit. There may be situations, though, where you end up with a large lump sum of money. Maybe you were the beneficiary of an inheritance, or perhaps you’ve been gifted deposit money by your parents. Maybe, lucky you, you’ve won some money.

Regardless of how you come across it, it’s certainly a nice windfall. But it doesn't mean you're guaranteed to get a loan.

The bad news

Even if you have money in the bank, most lenders require what’s known as genuine savings. This means they want you to demonstrate an ability to save money. Saving money over a period of time shows financial discipline, and that’s definitely a character trait lenders want in their home loan customers.

So in most cases, even if you come across a large sum of money, a lender will want you to hold it in your account for at least three months. For some lenders the time can be as long as six months.

Now the downside of this is that by the time you’ve held the funds long enough to meet the genuine savings threshold, house prices might have moved even further out of reach. Or, the property you had your eye on may have come and gone.

The good news

Ready for some good news? There are still plenty of lenders who can accept non-genuine savings as part of your deposit under certain conditions.

There are a whole range of specialist and non-bank lenders who are happy to approve your home loan without having to prove a savings history.

For some of these lenders, having a deposit of 5% is the main concern.

Now, you’ll still need to meet these lenders’ credit criteria. That means you’ll need to have a good history of paying your bills on time. You’ll also need to have a steady income and be able to demonstrate that you can make your home loan repayments without causing yourself financial stress.

But if you are lucky enough to have come into some money, whether it’s an inheritance or gift, you don’t have to wait to get into the housing market.

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