Genuine savings means the money that you have saved up gradually over time.
Check to see if you are eligible for a home loan
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
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:
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.
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%.
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?
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:
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.
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.
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.
Lenders review your history to predict future behaviour. Genuine savings give them a clear picture of your reliability with money.
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.
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.
Banks use your saving pattern to estimate how much you can comfortably repay.
This makes your application safer for both you and the lender.
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.
From a lender’s perspective, genuine savings help maintain a strong loan portfolio.
It’s a win-win: you get a fair loan, and lenders get reliable clients.
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.
Some lenders may waive genuine savings requirements for strong applicants, but it’s not guaranteed. You may qualify if you have:
Even then, demonstrating some genuine savings is always better. It gives you leverage and reassures lenders.
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.
Check to see if you are eligible for a home loan
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.
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.
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.
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.
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.
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.
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:
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.
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.
Lenders want to see a consistent savings pattern in one account for at least 3 months.
When funds are held in a joint or family account, lenders may question who actually owns the money.
Depositing a large sum right before applying can invalidate your genuine savings pattern.
Gifts, tax refunds, or sale proceeds can sometimes be counted, but only if held for at least 3 months.
Lenders verify your savings during the loan process.
Lenders prefer a clear separation between personal and business finances.
Frequent overdrafts or bounced payments show poor money management, even if you have savings.
Not setting up regular transfers can make your savings pattern look irregular.
Large cash deposits are harder for lenders to verify and may not count as genuine savings.
Simply having money in your account isn’t always enough.
Funds earmarked for stamp duty, loan fees, or moving costs shouldn’t be counted as genuine savings.
Bonuses, commissions, or irregular contract payments are risky if included in savings.
By avoiding these common mistakes, you’ll make it easier for lenders to approve your loan and show you’re financially responsible.
Would you like to learn about your situation?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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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