Genuine savings are funds a lender accepts as proof that you can save regularly. They show you can manage the discipline of loan repayments before the lender hands you a large debt.
What Counts as Genuine Savings
Lender policies vary, but these are commonly accepted:
- Savings held for three months or more in your own account
- Savings built up through regular deposits over three months or more
- Shares or managed funds held for three months or more
- Equity in property you already own
- A clear rental history, which some lenders accept in place of savings (often 6 to 12 months paid through an agent)
What Usually Does Not Count
- Gifts from family (acceptable as part of the deposit, but not as genuine savings unless held for the required period)
- Inheritances or lump sums received recently
- Tax refunds or bonuses just paid in
- Government grants, which are not your own savings
When Lenders Require It
Genuine savings rules mostly apply to higher LVR loans. Most lenders ask for genuine savings of about 5% of the purchase price when you borrow above 85% LVR. At 80% or 85% LVR and below, many lenders do not require it at all.
Some lenders waive the requirement for borrowers with a strong rental history, and some non-bank lenders do not ask for it. This is one of the areas where lender choice makes a real difference.
How to Build Genuine Savings
- Open a dedicated savings account and leave the money untouched
- Set up a regular transfer on payday
- If family is helping, have the gift paid in early so it has time to season
- Keep your rental ledger if you rent through an agent
A NIK Finance broker can tell you which lenders will accept your savings history before you apply.