In the context of a home loan, “own contribution” refers to the amount of money that a borrower contributes towards the purchase of a home. This is the portion of the purchase price that is not financed by the home loan, but rather comes from the borrower’s own savings or other sources of funds.
The own contribution is important because it can affect the terms of the home loan, including the interest rate and the loan-to-value ratio (LVR). Generally, a higher own contribution can result in more favorable loan terms, as it reduces the lender’s risk and demonstrates the borrower’s financial stability.