Using a gifted deposit – home loan comparison

Home buyers with generous relatives can use a cash gift a home deposit, but you still need to prove you can repay your lender.

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Most lenders are happy for immediate family members to give their children a gifted deposit – home loan deposits are hard to save for, and a non-refundable cash gift can be a massive boost a borrower's mortgage deposit.

But there are a few rules and criteria you need to know to make sure the cash gift meets the bank’s policies.

When money is gifted to a property buyer close to purchase time, a gift letter or statutory declaration needs to be signed by the family member, stating that the money is to be used for the purchase of property and that the loan is unconditional. The rules around non-refundable gifts state that it needs to be from an immediate family member, which includes de facto, siblings, grandparents and parents.

Learn more about gift letters for home loans

Mortgage Broker Daniel Corran from McCombe Finance says lenders often require that the gift be held in the account for a minimum of three months before purchase application approval.

This is especially the case, Corran says, when a potential home-buyer has less than a 20 per cent deposit saved up, as this is the minimum amount required under the bank’s mortgage lenders’ insurance policy, which protects the bank against the risk of a borrower defaulting on a loan.

Most borrowers also need to demonstrate their own minimum 5% of genuine savings. This means that if you're buying a property worth $500,000, the bank wants to see evidence of your own savings worth 5%, or $25,000. Your family member might then be willing to give you a cash gift worth $75,000, giving you a 20% deposit.

The bank will sometimes ask to see a person’s previous banking records as evidence that a person is able to save money over a continuous period and is therefore likely to be able to service a home loan.

Read the full guide to saving a home loan deposit

"The paperwork required regarding the gift differs between lenders,” Corran says. So it’s wise to get some help from a mortgage broker or do your research before submitting a loan application with a non-refundable gift included.

Corran says some families consider using their own home or an investment property as security in a “family-pledge” situation rather than gifting cash, however, if the borrower defaults on their mortgage, then the family member’s property is at risk when it is cross-secured. For this reason, Corran says non-refundable gifts are usually safer for families as there is no recourse against assets.

The final point Corran tells his clients when they’re considering giving a non-refundable gift to a family member is to make sure that it’s not self-sacrificing and that it doesn’t jeopardise the financial position of the gift-giver.

'The giftor should seek independent financial advice for themselves to ensure their viability to give the gift – to make sure it’s not going to significantly reduce the giftor’s standard of living or interrupt their cash flow,' he says.

Genuine savings explained

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. 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.

But if you have at least 5% of the deposit in genuine savings (it's been in your account for three months) the rest can be a gift. Of course, every lender has its own lending criteria and some may accept the whole deposit as a gift.

Compare loans for first home buyers

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years
Name Product Interest Rate (p.a.) Comp. Rate (p.a.) Fees Monthly Payment

St.George Fixed Rate Advantage Package P&IHome 2Y Fixed≥ 20% Deposit

St.George Fixed Rate Advantage Package
1.94%
3.40%
  • App: $0
  • Ongoing: $395 p.a.
$551.07
$3,000 refinance cashback
Borrowers with 20% deposits or equity can get this competitive fixed rate loan. Refinancers borrowing $250,000 or more can get a $3,000 cashback (Other terms, conditions and exclusions apply). Refinancers Only.

Westpac Fixed Option Home Loan Premier Advantage Package P&IHome 2Y Fixed≥ 5% Deposit

Westpac Fixed Option Home Loan Premier Advantage Package
1.99%
3.48%
  • App: $0
  • Ongoing: $395 p.a.
$554.81
$3,000 refinance cashback
Lock in a low fixed rate for 2 years that allows you to make up to $30,000 in extra repayments and buy your home with a 5% deposit. $3,000 cashback for eligible refinancers. Apply by 31 August 2021. Terms and conditions apply.

HSBC Home Value Loan P&IHome≥ 30% Deposit

HSBC Home Value Loan
2.19%
2.20%
  • App: $0
  • Ongoing: $0 p.a.
$569.91
$3,288 refinance cashback offer
This competitive variable rate loan is available for borrowers with 30% deposits. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.

loans.com.au Smart Booster Discount Variable Home Loan P&IHome≥ 20% Deposit

loans.com.au Smart Booster Discount Variable Home Loan
1.99%
2.47%
  • App: $0
  • Ongoing: $0 p.a.
$554.81
Home buyers can get a very low discounted variable rate for the first year. Requires a 20% deposit. Add an offset account for an additional 0.10% on your interest rate. Get your loan processed fast and settle within 30 days.

UBank UHomeLoan Variable Rate P&IHome≥ 20% Deposit

UBank UHomeLoan Variable Rate
2.34%
2.34%
  • App: $0
  • Ongoing: $0 p.a.
$581.39
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.

Suncorp Back to Basics Home Loan P&IHome≥ 20% Deposit

Suncorp Back to Basics Home Loan
2.44%
2.45%
  • App: $0
  • Ongoing: $0 p.a.
$589.12
A competitive variable interest rate loan with low fees. The establishment fee is waived if you borrow $150,000 or more.

homeloans.com.au Low Rate Home Loan with Offset P&IHome≥ 10% Deposit

homeloans.com.au Low Rate Home Loan with Offset
2.59%
2.61%
  • App: $0
  • Ongoing: $0 p.a.
$600.83
Save on interest with a free 100% offset account and buy your property with just a 10% deposit. This loan is not available for construction.

Greater Bank Great Rate Fixed Home Loan P&IHome 1Y Fixed≥ -10% Deposit

Greater Bank Great Rate Fixed Home Loan
1.69%
3.49%
  • App: $0
  • Ongoing: $0 p.a.
$532.6
Get one of the lowest rates on the market with this fixed rate mortgage. NSW, QLD and ACT residents only.

loans.com.au Green Home Loan P&IHome≥ 10% Deposit

loans.com.au Green Home Loan
2.08%
2.36%
  • App: $0
  • Ongoing: $0 p.a.
$561.57
Buying an energy-efficient home to live in? Get a discounted rate and borrow up to 90%.

Westpac Flexi First Option Home Loan P&IHome≥ 5% Deposit

Westpac Flexi First Option Home Loan
2.29%
2.72%
  • App: $0
  • Ongoing: $0 per month
$577.55
A flexible and competitive variable rate loan from Westpac. This loan is available with a low deposit.

IMB Budget Home Loan P&IHome≥ 5% Deposit

IMB Budget Home Loan
2.68%
2.74%
  • App: $449
  • Ongoing: $0 p.a.
$607.92
NSW and ACT customers only. You can get an interest rate discount for a limited time with this competitive variable mortgage.

Newcastle Permanent Building Society Premium Plus Package Fixed Rate P&IHome 1Y Fixed≥ 5% Deposit

Newcastle Permanent Building Society  Premium Plus Package Fixed Rate
2.19%
3.83%
  • App: $0
  • Ongoing: $395 p.a.
$569.91
$2,000 refinance cashback
Enjoy a competitive rate with no application fee for this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.

loans.com.au Smart Booster Discount Investor Variable Home Loan P&IInvestment≥ 20% Deposit

loans.com.au Smart Booster Discount Investor Variable Home Loan
1.99%
2.71%
  • App: $0
  • Ongoing: $0 p.a.
$554.81
If you have an owner occupier loan with loans.com.au you can also get this very low rate variable mortgage for your investment property. Principal and interest repayments. Add an offset account for an additional 0.10% on your interest rate. Get your loan processed fast and settle within 30 days.

AMP Bank Professional Package Fixed Loan P&IHome 2Y Fixed≥ 20% Deposit

AMP Bank Professional Package Fixed Loan
1.88%
2.84%
  • App: $0
  • Ongoing: $0 p.a.
$546.6
Get a low fixed rate package with no application or settlement fee. Available with a 20% deposit. Other fees and charges apply.

IMB Budget Home Loan P&IHome≥ 20% Deposit

IMB Budget Home Loan
2.48%
2.54%
  • App: $449
  • Ongoing: $0 p.a.
$592.23
A competitive variable rate for borrowers with 20% deposits saved. Available for NSW and ACT borrowers only.

UBank UHomeLoan Fixed P&IInvestment 3Y Fixed≥ 20% Deposit

UBank UHomeLoan Fixed
2.09%
2.60%
  • App: $0
  • Ongoing: $0 p.a.
$562.33
Pay no ongoing fees on this competitive investment loan and fix your rate for 3 years.

Well Home Loans Balanced Variable P&IHome≥ 20% Deposit

Well Home Loans Balanced Variable
1.99%
2.02%
  • App: $250
  • Ongoing: $0 p.a.
$554.81
A very low interest rate for home buyers with 20% deposits saved. Add an offset account for a small fee.

ME Flexible Home Loan Fixed with Members Package P&IHome 2Y Fixed≥ 20% Deposit

ME Flexible Home Loan Fixed with Members Package
1.89%
3.17%
  • App: $0
  • Ongoing: $395 p.a.
$547.35
$3,000 cashback when refinancing a loan of $250,000 or more. Other conditions apply. Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.

IMB Fixed Rate Home Loan P&IHome 2Y Fixed≥ 5% Deposit

IMB Fixed Rate Home Loan
1.97%
2.88%
  • App: $449
  • Ongoing: $6 per month
$553.31
NSW and ACT customers only. Lock in a low fixed rate for two years. Available with a 5% deposit.

Bank of Melbourne Basic Home Loan P&IHome≥ 20% Deposit

Bank of Melbourne Basic Home Loan
2.49%
2.51%
  • App: $0
  • Ongoing: $0 p.a.
$593.01
A low fee, low rate variable rate loan for home buyers. Requires at least a 20% deposit.

HSBC Fixed Rate Home Loan Package P&IHome 2Y Fixed≥ 20% Deposit

HSBC Fixed Rate Home Loan Package
1.88%
2.86%
  • App: $0
  • Ongoing: $390 p.a.
$546.6
Lock in a low fixed rate for 2 years and buy your home with a 20% deposit. This loan also lets you make extra repayments.

Well Home Loans Balanced Fixed Home Loan P&IHome 3Y Fixed≥ 10% Deposit

Well Home Loans Balanced Fixed Home Loan
2.14%
2.06%
  • App: $250
  • Ongoing: $0 p.a.
$566.11
A low 3 year fixed rate for home buyers. Add a 100% offset account with a $10 monthly fee. Not available for construction purposes.

IMB Fixed Rate Home Loan P&IInvestment 3Y Fixed≥ 10% Deposit

IMB Fixed Rate Home Loan
2.35%
3.33%
  • App: $449
  • Ongoing: $6 per month
$582.16
NSW and ACT customers only. A 3 years fixed rate investor which allows extra repayments to be made.

UBank UHomeLoan Fixed IOInvestment 3Y Fixed≥ 20% Deposit

UBank UHomeLoan Fixed
2.24%
2.64%
  • App: $0
  • Ongoing: $0 p.a.
$573.72
Pay no ongoing fees on this investment loan fixed for 3 years.

Newcastle Permanent Building Society Premium Plus Package Fixed Rate P&IHome 3Y Fixed≥ 5% Deposit

Newcastle Permanent Building Society  Premium Plus Package Fixed Rate
2.39%
3.66%
  • App: $0
  • Ongoing: $395 p.a.
$585.25
$2,000 refinance cashback
A two year fixed rate home loan with no application fees. $2,000 cashback for eligible refinancers borrowing $250,000 or more.

Suncorp Home Package Plus Fixed P&IInvestment 3Y Fixed≥ 20% Deposit

Suncorp Home Package Plus Fixed
2.28%
3.15%
  • App: $0
  • Ongoing: $0 p.a.
$576.78
$3,000 refinance cash bonus
Borrowers with 20% deposits can lock in a low fixed rate loan for three years. Eligible new borrowers can get the annual package fee reimbursed for the life of the loan. $3,000 refinance cash bonus for eligible borrowers. Other terms, conditions and eligibility criteria apply.

Bank of Melbourne Advantage Package Fixed Home Loan P&IInvestment 2Y Fixed≥ 20% Deposit

Bank of Melbourne Advantage Package Fixed Home Loan
2.24%
3.91%
  • App: $0
  • Ongoing: $395 p.a.
$573.72
$3,000 refinance cashback.
Lock in a low rate for two years with this competitive investment package loan. Refinancers borrowing $250,000 or more can get a $3,000 cashback (Other terms, conditions and exclusions apply). Refinancers Only.

St.George Basic Home Loan P&IHome≥ 20% Deposit

St.George Basic Home Loan
2.49%
2.51%
  • App: $0
  • Ongoing: $0 p.a.
$593.01
Competitive, flexible variable rate loan from St.George. Low fees and available with a 10% deposit.

homeloans.com.au Low Rate Home Loan with Offset P&IInvestment≥ 10% Deposit

homeloans.com.au Low Rate Home Loan with Offset
2.74%
2.76%
  • App: $0
  • Ongoing: $0 p.a.
$612.67
Access a fee-free offset account and a special interest rate for investors. This loan is not available for construction.

Well Home Loans Balanced Variable P&IHome≥ 10% Deposit

Well Home Loans Balanced Variable
2.52%
2.55%
  • App: $250
  • Ongoing: $0 p.a.
$595.35
A very low variable interest rate for borrowers with a 10% deposit. Add a 100% offset account for $10 a month. Not available for construction purposes.

Newcastle Permanent Building Society Fixed Rate Home Loan P&IHome 1Y Fixed≥ 5% Deposit

Newcastle Permanent Building Society Fixed Rate Home Loan
2.29%
4.11%
  • App: $0
  • Ongoing: $0 p.a.
$577.55
$2,000 refinance cashback
Competitive fixed rate for home buyers.Available with a 10% deposit.$2,000 cashback for eligible refinancers borrowing $250,000 or more.

UBank UHomeLoan Fixed P&IHome 1Y Fixed≥ 20% Deposit

UBank UHomeLoan Fixed
1.79%
2.32%
  • App: $0
  • Ongoing: $0 p.a.
$539.94
Fix your mortgage for 1 year with a very competitive rate and no ongoing fees.

Newcastle Permanent Building Society Premium Plus Package Home Loan P&IHome≥ 20% Deposit

Newcastle Permanent Building Society Premium Plus Package Home Loan
2.94%
3.34%
  • App: $0
  • Ongoing: $395 p.a.
$628.65
$2,000 refinance cashback
New borrowers or refinancers can get a discounted rate with this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.

Suncorp Back to Basics Home Loan P&IHome≥ 10% Deposit

Suncorp Back to Basics Home Loan
2.59%
2.60%
  • App: $0
  • Ongoing: $0 p.a.
$600.83
A competitive variable interest rate loan with low fees. The establishment fee is waived if you borrow $150,000 or more.

IMB Fixed Rate Home Loan P&IHome 3Y Fixed≥ 5% Deposit

IMB Fixed Rate Home Loan
1.97%
2.81%
  • App: $449
  • Ongoing: $6 per month
$553.31
NSW and ACT customers only. 3 years fixed interest terms and free access to redraw facility online. Available with a 10% deposit.

Newcastle Permanent Building Society Real Deal Home Loan P&IHome≥ 20% Deposit

Newcastle Permanent Building Society Real Deal Home Loan
2.59%
2.63%
  • App: $595
  • Ongoing: $0 p.a.
$600.83
$2,000 refinance cashback
$2,000 cashback for eligible refinancers borrowing $250,000 or more.
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