Genuine savings is a term used by lenders to describe savings that a home loan applicant has saved over a period of time, generally between 3 and 6 months. What the lender is looking for with genuine savings is a diligent pattern of savings which demonstrates to the lender that you, as a borrower, are disciplined enough to pay off a mortgage.

In general, lenders will accept as genuine savings any funds that amount to 5% or more of the purchase price.

Most lenders don’t require genuine savings if your LVR is 80% or less. The higher your LVR the more likely it is that the lender will want to see evidence of genuine savings.

Examples of Genuine Savings

  • Savings held or accumulated over at least three months in your bank account
  • Term deposits held for at least three months
  • Shares or managed funds held for at least three months
  • Some lenders will accept rent paid as evidence of genuine savings
  • A cash gift held for at least three months
  • Inheritance funds held for at least three months
  • Contributions from the First Home Super Saver Scheme

What are not considered genuine savings?

  • Money from the sale of an asset other than property, i.e. your car
  • Your tax returns
  • Money you borrowed from another party
  • The First Home Owners Grant (FHOG)
  • Monetary gifts
  • Inheritance

Lenders are mostly concerned with minimising their risk and they want to see evidence that you have the capacity to repay your mortgage.

Every lender has slightly different criteria so please give us a call and we can advise you on which lender is the best fit for your particular situation. Not all lenders require genuine savings and some have specific mortgage products to cater for borrowers who don’t have a history of genuine savings.