Saving money, e.g., genuine savings, is an important way to reach financial goals, whether it’s building an emergency fund or saving for retirement. But not all savings are the same. Genuine savings are a unique way to save money that can be used to help you make significant financial progress in your home loan application. 

In this blog, we’ll take a closer look at genuine savings, how they’re defined, and what you can do to make sure you meet the requirements. Whether you’re a first-time homebuyer or a seasoned investor, understanding how this kind of savings is key to securing the right home loan for your needs.

What is genuine savings?

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Genuine savings refers to funds that are freely available from a borrower’s own resources and not from debt or external sources. They are usually calculated and accumulated over a period of time, such as a year or more, and include any savings that are available to a borrower from income, assets, or other sources.

Why do banks require it?

These savings are considered “genuine” because they are the result of a borrower’s regular savings habits and demonstrate their ability to manage money responsibly. Lenders often require evidence of genuine savings when considering a home loan application, as it is an indicator of the borrower’s financial stability and ability to make regular loan repayments.

They also provide a cushion should an emergency arise or any other unforeseen circumstances that might lead to difficulty in making payments. Banks take it as a sign that the borrower has the means and motivation to pay back the loan. It is a measure banks use to limit their risk of potential default on the loan.

For those looking to borrow money, having genuine savings is an important factor in gaining approval from the bank. 

Do you meet the requirements?

Genuine savings are funds that have been held in your name or jointly with a partner for at least three months prior to the loan application date. These funds must be traceable and verifiable through financial institutions and a minimum deposit of 5% of the total loan amount must be provided. 

They may not be used for living expenses such as rent or bills and borrowers must also be able to prove that they have the capacity to pay back the loan.

If you only have non-genuine savings, there are alternative options available to you. Some lenders may accept other forms of savings such as an existing equity loan or a gift from a family member. You may also be able to use a guarantor to help you get a loan.

What is accepted as genuine savings

What is NOT accepted as genuine savings

  • Funds held in a savings account for at least three months
  • Equity in an existing property
  • Term deposit held for at least three months
  • Shares or managed funds held for at least three months
  • Rental history for the past six to twelve months
  • Regular savings plans (e.g., payroll savings plan)
  • Inheritance or gift (depending on the lender)
  • Borrowed funds
  • Non-cash incentives such as furniture or a car
  • Tax refunds or bonuses received in the past 3 months
  • Proceeds from the sale of an asset not in the form of cash
  • Cash gifts that cannot be documented
  • Rent paid to family members or friends
  • Inheritance or gift that cannot be documented

Is the Super Saver Scheme accepted as genuine savings?

Yes, the First Home Super Saver (FHSS) Scheme is accepted. Under this scheme, first-time home buyers can make voluntary contributions into their superannuation accounts, and then withdraw these contributions and associated earnings to use them as a deposit on their first home. 

The contributions made under the FHSS Scheme are considered genuine savings because they are made over time and demonstrate a regular savings pattern. However, only voluntary contributions, and not employer-mandated contributions, are eligible for withdrawal under the FHSS Scheme. There are also certain criteria and limits for financially accessing the scheme, so it is important to check with the Australian Taxation Office (ATO) communications for eligibility and details.

How much should I have in savings?

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Lenders usually require a minimum of 5-10% of the purchase price as genuine savings, although this can vary depending on the lender and type of loan. 

They are not the same, however, as a deposit for a home loan, although they are both important factors when applying for a loan.

Building genuine savings is not always easy, but it can be done. Setting aside a portion of your income each month is one way to do this, or you can look into investing in stocks, bonds, or other types of investments. Having a solid history of genuine savings can make you more attractive to lenders and help you get the loan you need.

Just remember that genuine savings are different than a home loan deposit. A deposit is a lump sum of money that you pay upfront when you apply for a loan.

Benefits of genuine savings when putting a deposit on a house

This can be a valuable asset for those looking to purchase a home and should be considered when planning for your next property purchase.

Increased likelihood of loan approval

Lenders are more likely to approve a home loan application if the borrower can demonstrate a history of saving and managing their finances responsibly.

Lower interest rates

Having genuine savings can often result in lower interest rates on your home loan, which can save you thousands of dollars over the life of your loan.

More flexible loan options

It can give borrowers access to a wider range of loan options, including lower deposit loans, which can help make buying a home more accessible.

Faster loan approval

If you can demonstrate genuine savings, the loan approval process may be faster and more straightforward, as the lender has confidence in your financial stability and ability to make repayments.

Reduced Lender’s Mortgage Insurance (LMI) costs

LMI is often charged to borrowers who have a deposit of less than 20% of the property value. However, some lenders may reduce or waive LMI fees for borrowers who can demonstrate genuine savings.

Better bargaining power

With genuine savings, borrowers may have more bargaining power when negotiating with lenders, potentially resulting in better loan terms and conditions.

Read: How to save for house deposit? 8 Tips for first time buyers

Using rent as genuine savings

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This strategy allows potential homebuyers to use rental payments they have made over a period of time as proof of savings for a deposit. This can be a great way to demonstrate to lenders that you have been regularly saving money.

Read: Your guide to using rental history to qualify for mortgage

Which lenders accept rent as genuine savings?

When applying for a loan, lenders may accept rental payments made over the last three to six months as genuine savings. Having a record of consistent rent payments can also help to prove that you can manage regular payments on a home loan.

There aren’t a lot of lenders that do this so you will need to check with your lender to see if this is an option.


Understanding what is accepted as genuine savings and what is not is crucial when applying for a home loan. It can determine your eligibility for a loan and the amount you can borrow, so it’s essential to get it right.

At Stryve Finance, we have the expertise and knowledge to guide you through the process and answer any questions you may have. Click the button below to chat with one of our brokers.