Lenders easing up on savings requirements

by Adam Smith20 Jun 2012

Lenders are beginning to relax genuine savings requirements, allowing some buyers to purchase homes sooner.

According to Smartline managing director Chris Acret, a number of lenders are beginning to "normalise" their requirements for borrowers to have a genuine savings history.

"While this is not so much a move being made by the ‘big four’, we have certainly seen some of the smaller lenders start to loosen up somewhat on a genuine savings requirement," he said.

Acret said many borrowers are capable of servicing a mortgage, but are not as adept at saving. For these borrowers, non-genuine savings such as gifts or inheritances could be the answer, Acret said.

"There is a lot to be said for genuine savings, as it does create that money management skill and discipline. If you find it difficult to save a reasonable deposit over a period of time it does prompt the question as to whether you’re ready for a mortgage; however, most people are better off at paying off debt than saving, so it might be that the non-genuine savings loan is still an option," he said.

Acret said a handful of lenders will now also consider rental payment history in lieu of genuine savings.