Lenders like to see a borrowers’ history of savings – normally the minimum is 3% for first home buyers or 5% for others of property value and they like to see this saved over a minimum of 3 months.
Funds to be held in the borrowers name and include:
- Funds held or accumulated in savings accounts for 3 months or more
- Term deposits held for 3 months or more
- Shares held for no less than the last 3 months
Exclusions from genuine savings:
- Advances on wages/commission from an employer
- Financing of a deposit
- Builder discount/finance
- Vendor discount/finance
- Proceeds from sale of motor vehicles
- Windfall gains
- One-off government payments (e.g. baby bonus, stimulus package payments)
If genuine savings cannot be demonstrated as per the above, the LVR must be less than 90% + lenders mortgage insurance.