Are your savings genuine savings?
Get a 2-minute assessment of whether your deposit qualifies — before you apply.
What Is Genuine Savings?
Genuine savings (also called "genuine deposit") refers to funds you have accumulated yourself over time — not money that appeared in your account suddenly as a lump sum gift, inheritance, or windfall.
Lenders use this concept as a proxy for financial discipline. If you've managed to save consistently over several months, you're less likely to struggle with mortgage repayments than someone whose deposit came from outside sources.
The 3-Month Rule
Most Australian lenders require genuine savings to have been held for a minimum of 3 consecutive months. This means lenders will ask for 3 months of bank statements showing:
- The funds were present at the beginning of the 3-month period
- No large unexplained deposits arrived mid-period
- The balance remained stable or grew over the period
The 3-month clock resets if you withdraw and redeposit funds. The continuity of holding matters.
What Counts as Genuine Savings?
| Source | Genuine savings? | Notes |
|---|---|---|
| Regular salary deposits into savings account | ✓ Yes | Best evidence — shows consistent saving behaviour |
| Term deposit held 3+ months | ✓ Yes | Strong evidence — locked-in savings show discipline |
| Shares/managed funds held 3+ months | ✓ Yes | Most lenders accept; current market value used |
| First Home Super Saver (FHSS) withdrawal | ✓ Yes | ATO-verified super contributions accepted by all major lenders |
| Rental payments (ledger evidence) | ✓ Yes | Accepted by many lenders as an alternative — shows payment capacity |
| Equity in an existing property | ✓ Yes | Most lenders accept existing equity in lieu of savings |
| Sale proceeds from previous property | ✓ Yes | Demonstrates prior property ownership — genuine savings proxy |
| Gift from parents/family | ✗ No (alone) | Not genuine savings by itself; see gifted deposit section below |
| Inheritance lump sum | ✗ No (alone) | Same issue as gift — not earned/accumulated by the borrower |
| Tax refund deposited as lump sum | ✗ No (alone) | May be accepted if held 3+ months after deposit |
| Government grants (FHOG, HomeBuilder) | ✗ No (alone) | Not considered genuine savings — can supplement but not replace |
| HECS/HELP repayment refund | ✗ No (alone) | Lump sum — needs 3 months seasoning |
Gifted Deposits: The Most Common Misunderstanding
Many first home buyers receive help from parents — a "Bank of Mum and Dad" contribution toward the deposit. This is very common and perfectly legal. But lenders treat gifts differently from genuine savings.
How lenders treat gifted deposits:
| Scenario | How lenders typically assess it |
|---|---|
| Gift only, no own savings | Declined or must use specialist lender with no genuine savings requirement |
| Gift + 5% genuine savings from own income | Accepted by most major lenders — gift covers remainder of 20% deposit |
| Gift held in account 3+ months with own regular contributions | Some lenders will accept the combined balance as genuine savings |
| Gift used as guarantor (security guarantee) | Avoids deposit requirement entirely — separate product (family pledge) |
The practical rule: if you have at least 5% of the purchase price as genuine savings, most lenders will accept a gift for the remaining deposit amount.
Which LVR Triggers the Genuine Savings Requirement?
Not all loans require genuine savings. The rule typically applies when you're borrowing a large proportion of the property value.
| Deposit size | LVR | Genuine savings required? |
|---|---|---|
| 20% or more | 80% or below | Generally no — lenders are less strict |
| 15–19% | 81–85% | Often required — varies by lender |
| 10–14% | 86–90% | Usually required — most lenders enforce this |
| 5–9% | 91–95% | Almost always required — tight genuine savings rules apply |
Lenders That Waive the Genuine Savings Requirement
Some lenders have more flexible policies. These are particularly useful for borrowers who have a large gift, FHOG funds, or other non-savings sources making up their deposit.
| Lender type | Genuine savings policy | What they accept instead |
|---|---|---|
| Most Big 4 banks (CBA, ANZ, NAB, Westpac) | Strict at LVR >90% | 5% genuine savings required; gift for remainder only |
| Select second-tier lenders (St George, BankWest) | Moderate — 85% LVR threshold | Rental history as alternative evidence |
| Specialist lenders (Pepper, La Trobe, Liberty) | No genuine savings requirement | Gift only accepted; LMI applies; higher rates |
| First Home Guarantee (federal scheme) | Waived for eligible applicants | 5% deposit accepted regardless of source |
| Family Home Guarantee (single parents) | Waived for eligible applicants | 2% deposit accepted regardless of source |
The FHSS Scheme and Genuine Savings
The First Home Super Saver (FHSS) scheme allows you to voluntarily contribute up to $15,000 per year (capped at $50,000 total) into superannuation and then withdraw it for a first home deposit.
Because these are your voluntary contributions — not employer contributions — they're treated as genuine savings by all major Australian lenders. They're one of the best ways to build a genuine savings track record while also getting the tax benefit of super contributions.
How FHSS helps with genuine savings:
- Voluntary super contributions show up as regular, disciplined deposits
- ATO verification letter provides clean proof of the amounts
- Counts as genuine savings even though held inside super (not a bank account)
- Can be combined with other savings — FHSS + savings account = strongest application
Rental History as an Alternative
If you've been renting and paying consistently, many lenders will accept 12 months of rental payment history as evidence of savings capacity — even in lieu of formal genuine savings.
This is particularly useful for borrowers who have been renting at market rate (which leaves little surplus to save) but have a spotless rental history. The logic: if you've been making $2,500/month rent payments on time for 2 years, you can likely handle a $2,500 mortgage.
How to Build Genuine Savings: Practical Steps
If you're 3–6 months away from applying, here's the fastest way to establish a clean genuine savings track record:
| # | Action | Why it helps |
|---|---|---|
| 1 | Open a dedicated savings account (different from everyday spending) | Clean, uncluttered statements — no noise from daily transactions |
| 2 | Set up an automatic transfer on payday — even $200/week | Shows consistent, voluntary saving behaviour across 3+ months |
| 3 | Do NOT withdraw from the genuine savings account | Withdrawals raise red flags — lenders want to see stable growth |
| 4 | Keep the gift/parental contribution in a separate account | Keeps your genuine savings trail clean and unambiguous |
| 5 | Start FHSS voluntary contributions in super | Tax-effective savings that count as genuine savings for lenders |
| 6 | Collect 3 full months of statements from the account | This is literally the document your lender will review — protect it |
How Much Genuine Savings Do You Actually Need?
The standard requirement is 5% of the purchase price in genuine savings. This is separate from any gift, FHOG, or grant amounts.
| Purchase price | 5% genuine savings required | 20% total deposit (no LMI) |
|---|---|---|
| $600,000 | $30,000 | $120,000 |
| $750,000 | $37,500 | $150,000 |
| $900,000 | $45,000 | $180,000 |
| $1,000,000 | $50,000 | $200,000 |
If you have 5% genuine savings, your parents' gift can cover the remaining 15% to get you to a 20% deposit — and most major lenders will accept this combination without issue.
Frequently Asked Questions
Genuine savings are funds held or accumulated in your account for at least 3 consecutive months. Regular salary deposits, term deposits, shares held 3+ months, rental ledger history, and First Home Super Saver (FHSS) withdrawals all qualify.
Not on its own. A gifted deposit is not genuine savings because you didn't save it yourself. However, if you have at least 5% genuine savings from your own income, most lenders will allow a gift to make up the remainder of a 20% deposit.
Most lenders require genuine savings when the LVR exceeds 80% (deposit is less than 20%). The requirement is strictest at 90–95% LVR. With a 20%+ deposit, many lenders don't enforce genuine savings rules at all.
Yes. Equity in an existing property is almost universally accepted as an alternative to genuine savings. This is common for upgraders or investors purchasing a second property.
No. The FHOG is a government grant and does not count as genuine savings. However, it can supplement a genuine savings deposit — for example, $20,000 genuine savings + $10,000 FHOG on a $600,000 purchase gives you 5% genuine savings plus the grant toward costs.
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