How you save your deposit can sometimes be one of the things a lender looks at when they assess your home loan application.
That’s why it’s important to understand what they see as ‘savings’. To make it simple, here’s what Pepper Money accepts as savings.
Genuine versus non-genuine savings
Each lender has their own set of rules around savings requirements. At Pepper, we define genuine savings as sums of money that have been held in your account for at least six months, and that demonstrate regular saving patterns over this period.
If you haven’t been able to put aside regular savings each month, but can show non-genuine savings such as a lump sum gifted to you that’s remained untouched for at least 6 months, then that would also be considered genuine savings.
Here are some examples of what we consider genuine savings:
- An amount you’ve put aside from your pay in a personal savings account regularly over a period of at least 6 months.
- Equity in your home (excludes equity accrued in off the plan purchases and advantageous sales).
- A fixed-term deposit (held by you for at least 6 months).
- Money you’ve received from the sale of your car or shares (held for at least 6 months).
- Gift (non-repayable and must be held in an account for at least 6 months).
- Cash (if held in an account for at least 6 months).
- Inheritance (held for at least 6 months).
Other deposit sources (non-genuine savings) we may accept include:
- A tax refund from the ATO.
- A bonus received from your employer or accrued leave (annual or long service).
For a full list of types of savings Pepper accepts, it's a good idea to talk to a Lending Specialist who can help assess your individual situation and run through your options.
When it comes to demonstrating genuine savings, you will need to provide documentation, like a bank statement, which shows the money was held or saved in your name for at least 6 months. If it is a gift, then a statutory declaration is required to confirm that this money is an endowment and non-repayable.
As a responsible lender, we ask about the source of your funds and how you’ve saved the deposit because it helps us understand your ability to budget and meet home loan repayments each month.
Whether your savings are considered genuine or non-genuine, we’ll always look at the bigger picture and if necessary, we’ll make more enquiries rather than make a decision on your application based on predetermined criteria.
Savings and Pepper home loans
Different home loan products have different saving requirements. Let's break down Pepper’s home loans and what can be considered part of your deposit:
Pepper Essential: if you are a borrower with a clean credit history, then this home loan product could work for you. Both genuine and non-genuine savings are accepted, however in the instance that your Loan to Value Ratio (LVR) is greater than 80%, then a deposit of 5% genuine savings is required (on Full Doc Essential loans only).
Pepper Easy: is ideal for a borrower with defaults that occurred two or more years ago. Pepper accepts genuine and non-genuine savings for this product.
Pepper Advantage: can be a solution for people who may have experienced credit impairment within the last two years. Pepper accepts genuine and non-genuine savings for this product.
To find out which home loan product might work for you, what deposit you’ll need and the savings requirements, speak to a Pepper Lending Specialist on 13 73 77 Monday to Friday between 8am and 6pm. All applications are subject to Pepper’s credit policy and loan suitability assessment.