A Comprehensive Guide to Genuine Savings Home Loans for Australian Expats

Genuine savings, as the term suggests, are funds that a borrower has saved over a certain period of time, typically at least 3 months. For Australian expatriates living and working overseas, understanding genuine savings is crucial when applying for a home loan back home.

Read on to understand what genuine savings are, why they are so important and more.

What is Genuine Savings and why is it important?

Genuine savings indicate a borrower’s financial discipline and ability to manage their money effectively. Many lenders require genuine savings as a part of their home loan application process. This is because it demonstrates that the borrower is capable of making regular, ongoing mortgage repayments.

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Exploring Lenders for Australian Expats

Lenders that accept rent as genuine savings

For Australian expats who have been renting while living abroad, some lenders accept rent as genuine savings. This can be a game-changer, as it allows you to leverage your rental history to qualify for a home loan. Some of the well-known lenders that accept rent as genuine savings include:

  • ANZ: If you’ve been renting for at least six months and can provide evidence of your rental payments, ANZ may consider it as genuine savings.
  • Westpac: With Westpac, you’ll need to have been renting for at least 12 months and provide evidence of your rental payments to be considered for genuine savings.
  • NAB: Similar to ANZ, NAB requires a minimum of six months of rental history and proof of rental payments to consider it as genuine savings.
  • Commonwealth Bank: Commonwealth Bank also requires a minimum of 12 months of rental history and evidence of rental payments to consider it as genuine savings.
  • St George: Lastly, St George requires a minimum of 12 months of rental history and evidence of rental payments to be considered for genuine savings.

Compare home loan interest rates from different lenders on our Lender Reviews page.

Lenders that do not require genuine savings

If you’re an Australian expat without genuine savings, there are still options available. Some lenders do not require genuine savings, instead considering other factors such as your income, employment history, and credit score.

Consult with a professional advisor or mortgage broker to find out which lenders do not require you to have genuine savings. Our specialist expat mortgage brokers can help ensure that you apply with the right lender according to your circumstance.

Rent as Genuine Savings: A Path to Homeownership for Expats

As an expat, owning a home may seem like a far-fetched dream. Saving for a deposit can be challenging when you’re living overseas, and the process of securing a home loan may seem daunting. However, there’s good news!

Some lenders in Australia now accept rental payments as “genuine savings” towards a home deposit, offering a path to homeownership for expats. 

Which lenders accept rent as genuine savings

As mentioned earlier, some lenders are willing to accept rent as genuine savings for Australian expats. These lenders typically require rental payment history of at least 12 months, demonstrating that you can manage regular financial commitments.

Benefits of using rent as genuine savings

Using rent as genuine savings offers several advantages for Australian expats, including:

  • Easier home loan approval: Demonstrating a history of regular rent payments can increase your chances of home loan approval.
  • Greater borrowing capacity: Rental history can help you qualify for a higher loan amount.
  • No need to save additional funds: You can leverage your rental history instead of needing to save a separate deposit.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Navigating A Few Genuine Savings Policies From Major Banks

If you’re looking to buy a home in Australia, you’ll likely need to demonstrate to your lender that you have genuine savings as part of your home loan application. This means that the money you use for your home deposit must come from sources such as regular savings, shares, or term deposits.

But what happens if you don’t have enough genuine savings to meet your lender’s requirements? Some banks in Australia offer alternative options that can help you meet the criteria for genuine savings. 

First Home Owners Grant NAB

The First Home Owners Grant (FHOG) offered by National Australia Bank (NAB) can provide additional funds for eligible first-time homebuyers. In some cases, NAB may accept the FHOG as part of your genuine savings, depending on their policy.

NAB Genuine Savings Policy

NAB generally requires borrowers to demonstrate genuine savings of at least 5% of the property’s value. This may include regular savings, rental history, and the FHOG.

ANZ Genuine Savings Policy

Australia and New Zealand Banking Group (ANZ) also require borrowers to show genuine savings. Their policy typically requires proof of at least 5% genuine savings over a 3-month period, including savings, rental history, and in some cases, the FHOG.

Non-Genuine Savings Home Loan Options

A non-genuine savings home loan is a mortgage that does not require the borrower to show proof of genuine savings. Instead, the lender may consider other factors like income, credit history, and employment stability.

Pros and Cons of Non-Genuine Savings Home Loans

While non-genuine savings home loans can offer an alternative path to homeownership, they come with both advantages and drawbacks.

Benefits

  • Faster approval process
  • Less documentation required
  • Suitable for those with no genuine savings

Drawbacks

  • Higher interest rates
  • Lower borrowing capacity
  • Limited lender options

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Tools to Help You Plan Your Home Loan Journey

From online calculators to budgeting apps, there are many tools available to help you plan your home loan journey and make informed decisions.

Home Loan Calculator

A home loan calculator can help you estimate your monthly repayments, interest charges, and the total cost of your mortgage. This valuable tool can assist you in determining the affordability of a home loan and help you plan your finances accordingly.

Genuine Savings Calculator

A genuine savings calculator can help you track your progress towards meeting genuine savings requirements. By inputting your current savings and monthly contributions, this tool can estimate how long it will take you to reach your target genuine savings amount.

Preparing for Your Home Loan Application as an Australian Expat

Buying a home is an exciting milestone for anyone, but as an Australian expat, it can be a bit more complicated. Applying for a home loan while living overseas can pose some unique challenges, but with the right preparation, securing a loan and purchasing your dream home is still possible.

Building a Strong Credit Score

Your credit score is one of the most critical factors when it comes to securing loans, credit cards, or even renting an apartment. It’s essentially a reflection of your creditworthiness and can affect the interest rates you receive and the amount of money you can borrow.

Why Credit Scores Matter for Expats

Credit scores are an essential factor for lenders when assessing your home loan application. A strong credit score indicates that you are a responsible borrower, which can increase your chances of approval and lead to more favourable loan terms.

Tips for Improving Your Credit Score

Your credit score is an essential aspect of your financial life. It can impact everything from getting approved for a credit card to securing a loan for a car or home. Unfortunately, building a strong credit score takes time and effort, and even small mistakes can have significant consequences.

Don’t worry, there are steps you can take to improve your credit score and set yourself up for financial success.

  • Pay your bills on time: This demonstrates your financial responsibility.
  • Reduce your credit card debt: Lowering your credit utilization ratio can improve your credit score.
  • Limit new credit inquiries: Too many inquiries in a short period can lower your credit score.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Exploring Deposit Options

Traditional Savings Deposit

A traditional savings deposit involves setting aside a certain percentage of the property’s value as a down payment. Genuine savings are often required for this type of deposit.

Rent as Genuine Savings

As discussed earlier, some lenders accept rent as genuine savings for Australian expats, allowing you to use your rental history to qualify for a home loan.

Family Guarantor

A family guarantor can also help you secure a home loan by providing additional security for the lender. This may be a viable option if you lack genuine savings or have a low credit score.

Understanding Loan-to-Value Ratios (LVR) and Mortgage Insurance

Loan-to-Value Ratio (LVR) is the proportion of the home loan amount compared to the property’s value. A lower LVR indicates that the borrower has a higher deposit or equity in the property.

Lenders Mortgage Insurance (LMI) is typically required when the LVR is above 80%. This protects the lender in case the borrower defaults on the loan. As an Australian expat, understanding LVR and LMI can help you plan for the costs associated with your home loan.

Tips for a Successful Home Loan Application as an Australian Expat

Lenders often have different requirements for expats, and navigating the process can be overwhelming. However, with some preparation and knowledge of what to expect, you can increase your chances of a successful home loan application.

  • Research and compare lenders: Find a lender that offers favourable terms and understands the unique needs of expats.
  • Gather all necessary documentation: This may include income statements, credit reports, and proof of genuine savings or rental history.
  • Seek professional advice: Consult with a mortgage broker or financial advisor to guide you through the application process.

Apply for Genuine Savings Home Loans as Australian Expats

Genuine savings home loans can provide a viable path to homeownership for Australian expats. With a bit of planning, research, and understanding of the lending requirements, you can increase your chances of securing a home loan and owning a property in Australia.

Whether you opt for the rent as a genuine savings option or explore alternative policies, it’s essential to choose a lender that understands your unique situation and offers solutions that meet your needs.

If you’re an Australian expat looking for more personalized guidance on securing a genuine savings home loan, speak to one of our expat mortgage brokers. They can provide tailored advice and help you navigate the lending requirements and application process. Don’t hesitate to reach out and schedule a consultation today!

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Frequently asked questions

Yes, some lenders offer non-genuine savings home loans. These lenders consider other factors such as income, credit history, and employment stability instead of genuine savings.

To use rent as genuine savings, you’ll need to provide your rental payment history (usually for at least 12 months) to a lender that accepts rent as genuine savings. This demonstrates your ability to manage regular financial commitments.

No, each lender has its own genuine savings policy. It’s essential to research and compare different lenders’ policies to find the best option for your situation.

Some lenders, like NAB and ANZ, may accept the First Home Owners Grant as part of your genuine savings, depending on their policy. Be sure to check with your chosen lender for specific requirements.

A home loan calculator helps you estimate your monthly mortgage repayments, interest charges, and the total cost of your home loan. In contrast, a genuine savings calculator assists you in tracking your progress towards meeting genuine savings requirements by estimating how long it will take to reach your target amount.

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