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Home loan spotlight: RAMS Rent Saver Loan

Home loan spotlight RAMS Rent Saver Loan

If you’re finding that paying rent and living expenses and saving for a home deposit are mutually exclusive activities, maybe it’s worth considering a home loan that accepts a solid history of rent payments as proof of your ability to save?

With rental prices in parts of Australia at a record high, some tenants are paying more in rent than they would for a mortgage. With inflated rents making it even harder to save for a deposit, there is reduced demand for home loans, but one company has decided to tackle the problem head on.

RAMS Rent Saver home loan is one of the first of its kind on the market.

“One of the biggest problems people have is paying rent and trying to get a home loan deposit together,” says RAMS’ Nigel Lopez-McBean.

“Even if you’ve been given money from a friend or relative, it doesn’t count as genuine savings. Genuine savings are seen as step-by-step increases in your bank account or savings that have been untouched for three months, and this can be a real stumbling block,” Lopez-McBean says.

“RAMS Rent Saver home loan allows people with a really good back history of paying rent to a reputable agent for 12 months or more to use that as proof of their ability to save.”

The fine print:

  • An all-in-one variable rate home loan with flexible deposit options
  • You can borrow up to 95 percent of the purchase price (or valuation if lower)
  • Redraw facilities
  • 15 free transactions every month across all access methods (ATM, EFTPOS and chequebook)
  • Up to 5 years interest only repayments
  • Choice of deposit methods including direct debit, salary credit, bank@post or BPAY
  • Lifestyle and Construction options available

This product is no longer available. Visit the RateCity home loans comparison page to find current product listings. 

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Learn more about home loans

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

Can I take a personal loan after a home loan?

Are you struggling to pay the deposit for your dream home? A personal loan can help you pay the deposit. The question that may arise in your mind is can I take a home loan after a personal loan, or can you take a personal loan at the same time as a home loan, as it is. The answer is that, yes, provided you can meet the general eligibility criteria for both a personal loan and a home loan, your application should be approved. Those eligibility criteria may include:

  • Higher-income to show repayment capability for both the loans
  • Clear credit history with no delays in bill payments or defaults on debts
  • Zero or minimal current outstanding debt
  • Some amount of savings
  • Proven rent history will be positively perceived by the lenders

A personal loan after or during a home loan may impact serviceability, however, as the numbers can seriously add up. Every loan you avail of increases your monthly installments and the amount you use to repay the personal loan will be considered to lower the money available for the repayment of your home loan.

As to whether you can get a personal loan after your home loan, the answer is a very likely "yes", though it does come with a caveat: as long as you can show sufficient income to repay both the loans on time, you should be able to get that personal loan approved. A personal loan can also help to improve your credit score showing financial discipline and responsibility, which may benefit you with more favorable terms for your home loan.