If you’re applying for a home loan, lenders don’t just want to see that you have money—they want to know you can actually save it. That’s where genuine savings come in.This guide, written by an expert mortgage broker in Brisbane, breaks down what genuine savings really mean, why banks care so much about them, and how you can build yours to boost your chances of loan approval.
Let’s dive in
Quick Summary
- Genuine savings typically refer to funds saved over 3-6 months
- It’s usually required for loans with less than 20% deposit
- Acceptable forms of genuine savings include regular savings deposits, term deposits, and shares
- Alternatives like rental history or parental gifts may be accepted by some lenders
- The amount required is typically 5% of the property value
- Not all lenders require genuine savings, especially for loans with larger deposits
1. What Is Considered Genuine Savings?
Genuine savings refers to funds that you’ve consistently saved over a period of time, typically 3-6 months. Lenders use this to prove your ability to manage money and make regular mortgage repayments. In Australia, genuine savings are usually required for home loans where the borrower has less than a 20% deposit. The amount needed is typically 5% of the property’s value, but this can vary between lenders.
Genuine savings can include:
- Savings held or accumulated over 3 months.
- Shares or managed funds held for 3 months or greater.
- Equity in real estate or property.
- Bonus held for 3 months or longer in your bank account.
- Term deposits held for 3 months or greater.
- First Home Super Saver Scheme (FHSSS).
- Some lenders allow exceptions if rent has been paid for the last 3 months or more.
When are genuine savings required?
The majority of lenders agree on what makes up genuine savings, but they differ about at what point genuine savings are required. Some lenders only need to see genuine savings if you have less than a 10% deposit (90% LVR), whereas others want to see it if you have less than a 15% deposit (over 85% LVR).
To play it safe, you can assume genuine savings are required when you are borrowing over 85-90% of the property value.
How much genuine savings should I have?
Most lenders generally want to see 5% of the purchase price as genuine savings. In some cases—like for investment properties— lenders require greater than 5% of the purchase price as genuine savings.
Remember that the genuine savings requirement only applies to the purchase price.
This means funds for stamp duty and other costs do not have to be held for 3 months or longer.
For example, if you’re purchasing a property for $500,000, you would need to hold at least $25,000 (5% of the purchase price) for 3 months or greater to meet the genuine savings policy. In addition to this, you would also need to hold enough funds to cover stamp duty/other costs applicable.
Also, be aware that Lenders Mortgage Insurance will be applicable if you have a deposit of less than 20%.
What is the 1% rule when it comes to genuine savings?
Most banks have something called the 1% rule. Essentially, this rule states that any deposits of over 1% of the purchase price made within the last 3 months will be discounted from your genuine savings.
For example, Tim wants to buy a home for $500,000. He already has $1,000 in his bank account, and his savings pattern for the last 3 months looks like this:
Month | Deposit | Balance |
1 | $500 | $1500 |
2 | $250 | $1,750 |
3 | $7,000 | $8,750 |
According to the 1% rule, the $7,000 cannot be included in his genuine savings pattern because it is over $5,000, which is 1% of the purchase price. Now, if he had deposited this before the last 3 months, he could include it in genuine savings. However, in this case, because it is within 3 months, the 1% rule applies, so it will need to be removed.
Read more: How much deposit do I need for a home loan?
2. What Is Not Classified As Genuine Savings?
If you have a minimal deposit, just holding money in your savings account isn’t going to cut it as genuine savings.
The banks want to see that you have held those savings for at least a few months. So, the following items do not count as genuine savings if they haven’t been held in your bank account for at least 3 months:
- Gifts from Parents or relatives.
- Inheritance from other family members.
- Refunds from tax returns.
- Bonus income from work.
- Sale of your assets like cars.
- First Home Owners Grant (FHOG) or Great Start Grant.
- Money held in a business banking account.
- Money from personal loans, credit cards or borrowed sources.
- Incentives paid from property developers or builders.
- Deposits paid from developers and builders
Here is a quick tip: If you’ve held any of the above funds in your bank account for 3 months or longer, this can be considered genuine savings.
For example, if you sold your car 6 months ago and the money has been in your account for the last 6 months, this will be counted as genuine savings. But if you’ve sold it only in the last month, it won’t count until you’ve held the funds there for 3 months or longer.
Read more: How to save for a house deposit.
Why Do Lenders Care About Genuine Savings?
When applying for a home loan in Australia, lenders don’t just look at how much money you’ve saved — they care about how you saved it. Genuine savings show consistent financial discipline, and that’s exactly what banks want before trusting you with a mortgage. Here are 8 reasons why lenders stress so much about genuine savings.
1. It Proves Financial Discipline
Genuine savings show that you can budget, plan, and stick to your goals. Lenders see this as proof that you manage your money well over time — not just when it’s convenient.
It tells them you’re not relying on a one-off gift or windfall. Consistent saving behaviour reassures lenders that you’ll handle repayments responsibly once you have your loan.
2. Genuine Savings Help Predict Borrower Reliability
Lenders review your history to predict future behaviour. Genuine savings give them a clear picture of your reliability with money.
- Saving consistently over months shows lenders you can manage repayments.
- It builds trust and improves your chances of home loan approval.
Even if your deposit is smaller than average, a strong savings history makes a difference.
3. It’s Key to Lenders Mortgage Insurance (LMI) Approval
If you’re borrowing more than 80% of a property’s value, lenders usually require Lenders Mortgage Insurance (LMI). Genuine savings help determine whether LMI approval is smooth.
- Showing your deposit comes from consistent saving proves you’re a lower-risk borrower.
- This can speed up the LMI process and make your application stronger overall.
4. It Builds Confidence in Long-Term Stability
Genuine savings show financial stability, not luck. You’ve demonstrated the ability to earn, save, and manage finances over time.
According to CoreLogic, borrowers with strong saving habits are less likely to default within the first 12 months of owning a home. Lenders feel confident that you can handle unexpected changes, like interest rate increases or job shifts.
5. It Helps Determine Borrowing Capacity
Banks use your saving pattern to estimate how much you can comfortably repay.
- For example, saving $1,000 per month shows lenders what you could handle in mortgage repayments.
- It ensures your loan size matches your actual lifestyle and budget.
This makes your application safer for both you and the lender.
6. Genuine Savings Can Improve Your Interest Rate or Loan Terms
Strong saving habits can lead to better loan terms. Borrowers who show consistency and control are often rewarded with lower interest rates or fewer conditions.
- Lenders see disciplined savers as safer bets.
- Even a small interest rate discount can save thousands over the life of your loan.
7. It Strengthens the Bank’s Loan Portfolio
From a lender’s perspective, genuine savings help maintain a strong loan portfolio.
- Fewer defaults improve the bank’s financial position.
- Approving borrowers with proven savings reduces long-term risk.
It’s a win-win: you get a fair loan, and lenders get reliable clients.
8. It’s Required for Some Government and Low-Deposit Loans
Programs like the First Home Loan Deposit Scheme (FHLDS) and some state grants still expect genuine savings, even if only a 5% deposit is required.
- This ensures government assistance goes to responsible borrowers.
- Showing genuine savings can make these programs easier to access and increase approval chances.
There Are Exceptions — But They’re Not Automatic
Some lenders may waive genuine savings requirements for strong applicants, but it’s not guaranteed. You may qualify if you have:
- Stable employment history
- Consistent rent payments for 6–12 months
- A guarantor supporting your loan
Even then, demonstrating some genuine savings is always better. It gives you leverage and reassures lenders.
Final Word: Why Genuine Savings Matter
Genuine savings aren’t just a tick-box requirement — they’re proof of financial readiness. They show lenders you can handle the ongoing responsibility of a mortgage.
At Hunter Galloway, our team of mortgage brokers in Brisbane helps you build genuine savings and strengthen your home loan application. We guide you step by step — from setting a savings goal to securing approval for your dream home.
3. Does Rent Count As Genuine Savings?
If you have a good rental history, some lenders will consider making an exception to the genuine savings policy. They will then consider deposits from other sources, like gifted funds from your parents that haven’t been held for over 3 months.
To use rent as genuine savings, you need to:
- Be currently renting and have at least 6 months of clean rental history. This means you should not have missed a single rental payment during those 6 months.
- Be currently renting via a licensed property manager, not a private rental. For example, renting from your parents will not be accepted.
- Ensure the names of the tenants on the lease are the same as the people who will be on the home loan application.
The good news is that if you can fit these criteria, the rent you have paid over the past 6 months will be considered genuine savings! Therefore, you can use a deposit sourced from “non-genuine” savings like a gift from your parents.
You will need a copy of the rental ledger or reference letter from your property manager as evidence in order to use rent as genuine savings.
Something to remember here: For the banks to consider that you’re paying your rent on time every time, you’ll need to pay before the period begins. For example, if your rental period is between the 1st and the 7th of each month, then making the payment before the 1st will be acceptable to the bank. So if you pay on the 28th of the previous month, this will be great. On the other hand, paying your rent on the 10th of the month (after the rental period) is considered a late payment and potentially means that your rental history isn’t sufficient to satisfy their genuine savings requirement. So be careful of that. Set up your payments a week before to ensure your rental history will come out clean.
If I rent, do I still need a deposit?
You will still need to provide a deposit for your home loan even if you are renting.
We recommend you have between 8-10% of the property purchase price in savings to use as a deposit. You can work with less than 8-10% if you have a Guarantor.
Case Study: Using Rent As Genuine Savings.
Nicole lived in Perth and had been working with a local mortgage broker who was referred by family. She found the home of her dreams for $500,000 and entered into a contract with a finance clause because her mortgage broker had given her a thumbs up to make an offer subject to finance.
Unfortunately, her finance application wasn’t all smooth sailing. The mortgage broker had not realised that she didn’t have genuine savings. Her deposit of $40,000 had come from the recent sale of her car. Needless to say, her local mortgage broker informed her they couldn’t assist because they could not demonstrate 5% of the purchase price held up in a bank account for 3 months or longer.
But Nicole stubbornly refused to accept this fate and stumbled upon our YouTube channel. She wasn’t sure if we could help because she lived in Perth, and we’re based in Brisbane. But she was surprised to find out that we help home buyers right around Australia.
When we spoke with Nicole, we discovered she’d been renting through a licensed real estate agent for the last 12 months, which some lenders can include as genuine savings. This meant that instead of showing money held in her bank account for 3 months or longer, we could use her rental history to show the banks that genuine savings were demonstrated. Using this strategy, we managed to successfully secure finance for Nicole’s dream home.
4. Lenders That Don't Require Genuine Savings
In recent times, some banks have eased up on their genuine savings requirement. The genuine savings requirement is largely determined by how much deposit you have on your home purchase.
20% deposit | There are no genuine savings required |
10-15% deposit | You no longer need to show genuine savings |
Less than 10% deposit | Some don’t need to see genuine savings, but others still do |
Most banks do not need to see any genuine savings if you are getting the help of a guarantor. |
If you have less than a 10% deposit, it is possible to get a home loan of up to 95% LVR without genuine savings, provided you meet some of the following criteria.
- You have been renting for the last 6 months
- You have been paying rent on time.
- You have been regularly employed over the past 12 months.
- You have a good credit score.
- You do not have too many credit cards or car loans.
Banks and lenders always change their lending criteria, so we haven’t published a list of lenders here because it would quickly become outdated.
Get in touch with our team to get the latest information and see if you are eligible for a non-genuine savings option. Complete a free assessment here or get in touch on 1300 088 065.
Read more: First Home Guarantee Scheme: How to buy with a 5% deposit.
How To Build Genuine Savings
If you’re planning to apply for a home loan and need to demonstrate genuine savings, here are some strategies to help you build them:
- Set up automatic transfers: Arrange for a portion of your income to be automatically transferred to a separate savings account each payday.
- Cut unnecessary expenses: Review your spending and identify areas where you can cut back. Redirect this money into your savings.
- Use a high-interest savings account: Look for accounts offering competitive interest rates to help your savings grow faster.
- Consider a term deposit: If you have a lump sum, a term deposit can be an effective way to demonstrate genuine savings.
- Keep your savings separate: Avoid dipping into your genuine savings for other expenses. Treat it as untouchable funds earmarked for your home deposit.
Remember, consistency is key. Lenders want to see a pattern of regular savings over time, not just a lump sum deposited at the last minute.
Common Mistakes That Can Cost You Loan Approval
Even if you’ve been saving diligently, certain mistakes can jeopardize your home loan application. Avoiding these pitfalls will improve your chances of approval and show lenders you’re financially responsible.
1. Not Keeping Savings in the Same Account
Lenders want to see a consistent savings pattern in one account for at least 3 months.
- Moving funds between multiple accounts or frequently switching accounts can raise red flags.
- Keep your savings in a dedicated account to demonstrate stability.
- A single account shows lenders the money truly belongs to you and reflects steady saving habits.
2. Using Joint or Family Accounts
When funds are held in a joint or family account, lenders may question who actually owns the money.
- Only include accounts in your name, or clarify your ownership with supporting documentation.
- This ensures your savings count fully toward genuine savings requirements.
- Providing clear proof of ownership can prevent delays in your home loan approval.
3. Making Large One-Off Deposits
Depositing a large sum right before applying can invalidate your genuine savings pattern.
- Lenders often apply the “1% rule,” where deposits over 1% of the purchase price within the last 3 months may be ignored.
- Build savings gradually to show a consistent habit instead.
- Large last-minute deposits can signal financial instability rather than disciplined saving.
4. Relying on Non-Genuine Funds Without Seasoning
Gifts, tax refunds, or sale proceeds can sometimes be counted, but only if held for at least 3 months.
- Using these funds immediately after receiving them can cause lenders to reject them as genuine savings.
- Always “season” non-genuine funds before including them in your deposit.
- Seasoned funds show lenders that you’ve built wealth responsibly over time.
5. Spending Down Your Balance Before Verification
Lenders verify your savings during the loan process.
- Spending your balance before this can undermine your application.
- Keep your funds intact until your lender confirms your account meets genuine savings requirements.
- Maintaining a stable balance demonstrates ongoing financial responsibility.
6. Mixing Personal and Business Funds
Lenders prefer a clear separation between personal and business finances.
- Mixing accounts can confuse the source of your savings and raise compliance concerns.
- Use dedicated personal savings accounts to make your money trail clear.
- Clear separation gives lenders confidence that your funds are genuinely yours.
7. Overdrawing Your Account
Frequent overdrafts or bounced payments show poor money management, even if you have savings.
- Lenders prefer accounts that show consistent positive balances over time.
- Even a single overdraft during the savings period can trigger extra scrutiny.
8. Ignoring Automated Savings or Payroll Deductions
Not setting up regular transfers can make your savings pattern look irregular.
- Lenders like to see consistent contributions, even if small, rather than sporadic deposits.
- Automatic transfers show discipline and make your savings record easier to track.
9. Using Cash Instead of Bank Transfers
Large cash deposits are harder for lenders to verify and may not count as genuine savings.
- Always transfer savings into a verified bank account to keep a clear trail.
- Documenting every deposit improves transparency and avoids potential questions during approval.
10. Failing to Include Supporting Evidence
Simply having money in your account isn’t always enough.
- Lenders may request statements, screenshots, or letters proving the source and history of funds. Missing this can delay approval.
- Supplying thorough documentation speeds up processing and reduces lender uncertainty.
11. Forgetting to Separate Future Expenses
Funds earmarked for stamp duty, loan fees, or moving costs shouldn’t be counted as genuine savings.
- Mixing these with your deposit can give lenders a misleading picture of your actual savings.
- Keeping these costs separate ensures your genuine savings are fully visible and verifiable.
12. Relying on Temporary or Unstable Income
Bonuses, commissions, or irregular contract payments are risky if included in savings.
- Lenders prefer stable, verifiable income to back up your genuine savings pattern.
- Using unstable income can make lenders question your ability to sustain regular repayments.
Expert Tips to Avoid These Mistakes
- Keep detailed records: Screenshots, bank statements, and transaction histories make verification easier.
- Document gifts or transfers: Provide letters or proof if using funds from family.
- Plan deposits carefully: Build a consistent saving pattern over months, not days.
- Monitor balances regularly: Ensure your accounts reflect steady growth without dips.
By avoiding these common mistakes, you’ll make it easier for lenders to approve your loan and show you’re financially responsible.
Bonus: Using Your Super As Genuine Savings
The First Home Super Saver Scheme is a scheme designed for first home buyers that allows you to put extra money from your pay into your super and then use that money as a deposit. The good news is if you’ve been putting money away into the First Home Super Saver Scheme, all that money can be considered genuine savings!
There are limitations on the amount you can save using the First Home Buyer Super Saver Scheme. Currently, the maximum you can put in any financial year is $15,000 and, in total, $50,000 across all years. However, it’s a really great scheme if you’re a first-home buyer and want a quick and easy way to prove genuine savings.
Remember: These are contributions on top of your minimum, and this only works if you were making payments over and above the regular contributions. Your minimum super contributions will not count as genuine savings because these contributions are normally taken from part of your salary anyway and, therefore, do not prove that you have genuinely saved.
Genuine Savings FAQs
Can a gifted deposit become genuine savings?
Yes—if the funds remain in your account for at least 3 months and your balance doesn’t drop, most lenders accept them as genuine savings. Keeping a clear record of the deposit is essential for verification.
Does paying rent count as genuine savings?
Some lenders accept a clean 6-month rental history as proof of genuine savings, especially if rent is paid on time through a licensed agent. This can sometimes replace the need to show savings from your own account.
How long must I show genuine savings for?
Usually at least 3 months, though some lenders prefer 6 months to demonstrate consistent saving behaviour. The longer your savings pattern, the stronger your application appears.
What happens if I move money between accounts?
That’s fine as long as you can provide statements showing a consistent balance and the same source of funds throughout the 3-month period. Lenders focus on transparency and traceability of your savings.
Can overseas savings be counted?
Yes—if they’ve been held in your name for at least 3 months and are easily transferable to Australia, with supporting bank statements. Make sure your lender can verify the funds quickly.
Do first-home buyer schemes remove the need for genuine savings?
Some, like the First Home Guarantee, may relax the requirement, but lenders still need evidence that you manage money responsibly. Showing savings patterns can improve your approval odds even with government assistance.
Is a term deposit considered genuine savings?
Yes—term deposits held for 3 months or longer count as genuine savings, provided they’re in your name. They demonstrate discipline and a commitment to setting aside funds for your home deposit.
Do shares count as genuine savings?
Yes—shares held for at least 3 months can count as genuine savings, provided you can provide statements showing ownership and consistent value. They can complement cash savings for your deposit.
Can I use rent as genuine savings?
Yes—some lenders accept a clean rental history as proof of genuine savings. To qualify, you typically need at least 6 months of on-time rent payments through a licensed property manager. Private arrangements, like renting from family, usually don’t count. Providing a rental ledger or reference letter helps lenders verify your rental history.
Next Steps And Settling Your New Home
Our team here at Hunter Galloway is here to help you buy a home in Brisbane.
Unlike other mortgage brokers who are just one-person operators, we have an entire team of experts to help make your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
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