Genuine Savings Requirement: What Counts (and What Doesn't) for a Home Loan

If you have been saving for a home deposit, you might assume any money in your bank account counts towards your deposit. In practice, most Australian lenders apply a specific test called the “genuine savings” requirement — and money that does not meet this test can derail your loan application even if your account balance looks healthy.

This guide explains exactly what genuine savings means, what counts, what does not count, how much you need, and how to demonstrate it to lenders. We also cover the exceptions and workarounds that can help if your savings do not fit the standard definition.

What Are Genuine Savings?

Genuine savings refers to money that you have accumulated over time through your own disciplined saving efforts. The purpose of the requirement is to demonstrate to the lender that you have the financial discipline to manage a mortgage — that you can consistently set money aside, live within your means, and sustain regular payments over an extended period.

It is not simply about having the money. It is about proving you earned it and saved it yourself, over time.

Most lenders define genuine savings as funds that have been held in your account for at least three months, showing a pattern of gradual accumulation rather than a single large deposit appearing shortly before your application. Some lenders require five months of savings history, though three months is the most common benchmark.

The requirement is not about the total amount in your account at a single point in time. It is about the history that led to that balance.

The 5% Rule: How Much Genuine Savings Do You Need?

The standard industry threshold is 5% of the purchase price. This means if you are buying a $750,000 property, you need to demonstrate at least $37,500 in genuine savings — even if your total deposit is higher.

Here is how the 5% genuine savings requirement scales:

Property Price	5% Genuine Savings Minimum	Total Deposit at 90% LVR	Total Deposit at 95% LVR
$500,000	$25,000	$50,000	$25,000
$600,000	$30,000	$60,000	$30,000
$750,000	$37,500	$75,000	$37,500
$900,000	$45,000	$90,000	$45,000
$1,000,000	$50,000	$100,000	$50,000

If you are borrowing at 95% LVR, your entire deposit may need to be genuine savings — because 5% is all you have. At 90% LVR, you need at least half your deposit to be genuine savings, with the remaining portion potentially coming from other sources (gifts, grants, etc.).

It is important to understand that the 5% is a minimum. Having more genuine savings strengthens your application. Lenders look at your overall financial profile, and a strong savings track record signals reliability.

What Counts as Genuine Savings

The following sources are generally accepted as genuine savings by Australian lenders. The common thread is that they involve your own effort over a sustained period.

1. Regular Savings From Salary or Income

This is the most straightforward form. Money saved progressively from your regular income, held in a savings or transaction account for at least three months, with bank statements showing a consistent pattern of deposits and balance growth.

The lender wants to see your account balance growing over time. They are looking for a pattern: regular income deposits, controlled spending, and a balance that trends upward over three or more months. Occasional small withdrawals are fine — the overall trajectory needs to be positive.

2. Term Deposits Held for Three Months or More

Money held in a term deposit for at least three months is typically accepted as genuine savings. The fixed nature of a term deposit demonstrates that you have set the money aside deliberately and have not needed to access it. You will need to provide the term deposit certificate or confirmation showing the deposit date, maturity date, and amount.

3. Shares or Managed Funds Held for Three Months or More

If you hold shares (listed on the ASX) or units in a managed fund that you have owned for at least three months, the current value of those holdings can count as genuine savings. You will need to provide evidence of the purchase date and current valuation.

Keep in mind that the value of shares and managed funds fluctuates. Lenders will typically use the current market value at the time of assessment, which may be lower than your purchase price if markets have fallen. Some lenders apply a discount to the market value to account for this volatility.

4. Equity in an Existing Property

If you already own a property (including an investment property), the equity you hold in that property is considered genuine savings. This is because you built the equity through deposit contributions, mortgage repayments, and property value growth over time.

To use equity as genuine savings, you will need a recent property valuation. The equity amount is calculated as the current property value minus the outstanding loan balance. This is particularly relevant for buyers upgrading from their first home or investors purchasing an additional property.

5. Superannuation Voluntary Contributions (Limited Cases)

In some cases, voluntary contributions to superannuation (above the compulsory employer contributions) can demonstrate a savings habit. However, superannuation itself cannot be used as a deposit (except under the First Home Super Saver Scheme), so this is more about demonstrating financial discipline than providing deposit funds.

If you have made withdrawals under the FHSSS, the withdrawn funds are generally treated as genuine savings by most lenders, provided you can show the contribution history and withdrawal documentation.

6. Rental History (Some Lenders)

A small number of lenders accept a consistent rental payment history as evidence of savings capacity — the logic being that if you have been reliably paying $600 per week in rent for 12+ months, you can manage a similar mortgage repayment. This is not universally accepted and is more common with non-bank lenders and specialist products, but it is worth asking about if your savings history is limited.

What Does NOT Count as Genuine Savings

The following sources are generally not accepted as genuine savings. They fail the test because the money was not accumulated through your own sustained saving effort.

1. Gifts From Family or Friends

Money received as a gift — whether from parents, grandparents, or anyone else — does not count as genuine savings regardless of how long it has been in your account. The key test is whether you earned and saved the money yourself.

Gifts can still form part of your total deposit. Most lenders accept gifted funds towards a deposit, but they cannot be used to satisfy the genuine savings component. You need 5% genuine savings on top of (or alongside) any gifted funds.

Some lenders require a signed statutory declaration from the gift-giver confirming the money is a genuine gift, not a loan that needs to be repaid.

2. Tax Refunds

A lump sum tax refund deposited into your account does not count as genuine savings because it is a one-off payment, not a demonstration of regular saving. If you receive a tax refund and it sits in your account for three months alongside your regular savings, the regular savings portion still counts — but the tax refund itself does not.

3. Inheritance

Money received through an inheritance is generally not considered genuine savings. Like gifts, an inheritance is a one-off windfall that does not demonstrate ongoing savings discipline. However, this varies between lenders — some will accept inherited funds if they have been held in your account for 3 to 6 months, particularly if the amounts are modest and you can show a savings pattern alongside them.

If you receive a significant inheritance, speak with a broker about which lenders have more flexible policies. The funds can still be used towards your deposit — the question is whether they satisfy the genuine savings test specifically.

4. First Home Owner Grant (FHOG)

Government grants like the First Home Owner Grant do not count as genuine savings. The FHOG can be used towards your deposit or settlement costs, but it does not satisfy the genuine savings requirement. You still need to demonstrate 5% genuine savings from your own efforts.

5. Cryptocurrency (Usually)

Most Australian lenders do not accept cryptocurrency holdings as genuine savings. The volatility, valuation challenges, and regulatory uncertainty around crypto assets make lenders reluctant to count them. If you hold crypto, you would generally need to sell it, deposit the proceeds into a standard bank account, and hold them for at least three months before they could be considered.

Even then, some lenders may question a large lump sum deposit appearing in your account and ask for its source — which circles back to the core issue that cryptocurrency gains are not viewed as regular savings.

6. Sale of Personal Assets

Proceeds from selling a car, jewellery, artwork, or other personal assets do not count as genuine savings. Like gifts and windfalls, they represent a one-off injection of funds rather than a sustained savings pattern.

7. Cash Savings (Not in a Bank Account)

If you have been saving cash at home and deposit it into a bank account, it does not count as genuine savings because there is no verifiable trail showing it was accumulated over time. Lenders need bank statements demonstrating the savings history.

How to Demonstrate Genuine Savings to Your Lender

When you apply for a home loan, the lender will ask for evidence of your genuine savings. Here is what you need to provide and what they are looking for.

Bank Statements (3 to 6 Months)

Provide complete bank statements for the most recent three to six months for every account that holds your savings. The lender will review these for:

Consistent deposits: Regular salary or income credits appearing at expected intervals
Gradual balance growth: The overall balance trending upward over the period, not a sudden lump sum appearing
Controlled spending: Evidence that your outgoings are manageable and that you are not living beyond your means
No unexplained large deposits: Any significant deposit that is not regular income will be questioned — you may need to provide source documentation

What a Strong Genuine Savings Profile Looks Like

A lender reviewing your statements wants to see a story: you earn a regular income, you consistently save a portion of it, and over three months (or more) your balance has grown steadily. The ideal profile shows:

Fortnightly or monthly salary deposits
Regular transfers to a dedicated savings account
A balance that grows each month
Reasonable lifestyle spending that leaves room for saving
No signs of financial stress (declined transactions, frequent minimum balance, reliance on buy-now-pay-later)

Common Red Flags

Large unexplained deposits (the lender will ask where the money came from)
Savings balance that appears suddenly rather than growing over time
Frequent withdrawals that deplete the savings balance
Multiple buy-now-pay-later accounts or high credit card balances
Gambling transactions (a serious red flag for any lender)

Lenders That Are Flexible on Genuine Savings

Not all lenders apply the genuine savings requirement equally. Some are more flexible, particularly in these situations:

Professional Borrowers

If you work in an eligible profession — such as medicine, law, accounting, engineering, or other qualifying fields — some lenders are more flexible on genuine savings requirements. The rationale is that your professional income and career stability provide sufficient confidence in your ability to service the loan, even if your savings history is shorter than three months.

Some lenders that offer professional LMI waivers also relax their genuine savings policies for the same borrowers. This is particularly helpful for newly qualified professionals who may have high incomes but limited savings history due to years spent in study or training.

Borrowers With Strong Rental History

As mentioned above, a small number of lenders accept 6 to 12 months of consistent rental payments as a substitute for (or supplement to) traditional genuine savings evidence. If you have been reliably paying rent at a level comparable to a mortgage repayment, this can work in your favour.

Borrowers Below 90% LVR

The genuine savings requirement is most strictly enforced at high LVRs (above 85%). If you are borrowing at 80% LVR or below, some lenders waive the genuine savings requirement entirely — because the larger deposit itself demonstrates financial capacity, regardless of how it was accumulated.

At 85% or 90% LVR, the requirement is standard at most lenders. At 95% LVR, it is almost universally required and strictly assessed.

How Genuine Savings Interact With LMI Waivers

If you qualify for a professional LMI waiver, the genuine savings requirement still applies — waiving LMI and meeting genuine savings are two separate assessments. However, as noted above, some lenders that offer professional waivers also take a more flexible approach to genuine savings for the same borrowers.

The practical implication is that if you are a qualifying professional with a 10% deposit that includes some gifted funds, you may be able to find a lender that:

Waives LMI based on your profession
Accepts a smaller genuine savings component (say 3% instead of 5%) given your professional income

This is not universal, and it requires working with a broker who understands which lenders offer this combination. But it is a meaningful advantage for professionals whose deposit includes a mix of savings and family support.

How Genuine Savings Interact With the First Home Guarantee

The First Home Guarantee (FHBG) allows eligible first home buyers to purchase with as little as 5% deposit without paying LMI. However, the participating lenders still require that the 5% deposit includes genuine savings — typically the full 5%.

This is an important detail that catches some first home buyers off guard. You cannot use a 5% gifted deposit under the FHBG and satisfy the genuine savings requirement. You need to have saved the 5% yourself over at least three months.

If your parents have given you money towards a deposit, you may need to save an additional 5% from your own income to meet the genuine savings test — which could push your total deposit above 5% and change the loan structure.

Tips for Building Genuine Savings Faster

If you need to demonstrate genuine savings and your current history is thin, here are practical strategies to build a compliant savings track record.

1. Open a Dedicated Savings Account

Separate your savings from your everyday spending account. Set up an automatic transfer on payday — even $500 per fortnight into a dedicated high-interest savings account creates a clear, verifiable trail.

2. Start the Clock Now

The three-month minimum starts from when you begin saving consistently. If you plan to apply for a home loan in four months, start building your savings trail today. The sooner you begin, the stronger your profile will be at application time.

3. Avoid Withdrawals

Once money is in your savings account, leave it there. Withdrawals — even if you redeposit the money — undermine the narrative of consistent saving that lenders are looking for. If you need an emergency fund, keep it in a separate account.

4. Automate Everything

Set up automatic transfers from your salary account to your savings account. This creates a regular, predictable pattern that lenders love to see. Manual transfers are fine too, but automatic transfers look more disciplined and consistent on your statements.

5. Save Windfalls Separately

If you receive a tax refund, bonus, or other one-off payment, deposit it into a separate account — not your primary savings account. This avoids creating a spike in your savings balance that could trigger questions. The one-off funds can still go towards your deposit; they just should not muddy your genuine savings trail.

6. Reduce Discretionary Spending Temporarily

Cutting back on dining out, subscriptions, and non-essential purchases for three to six months not only grows your savings balance faster but also creates bank statements that show responsible financial management. Lenders notice when spending is controlled.

7. Consider a Term Deposit

If you already have savings but they have been sitting idle without a clear growth pattern, moving funds into a three-month term deposit resets the clock with a clean, verifiable holding period. The term deposit certificate is straightforward evidence.

When You Do Not Need Genuine Savings

There are some situations where the genuine savings requirement does not apply or is significantly relaxed:

LVR at or below 80%: Many lenders waive the requirement when you have a 20% or larger deposit
Equity from an existing property: If you are using equity from another property you own, this is treated as genuine savings
Guarantor loans: When a parent or family member provides a guarantee using their property, the genuine savings requirement is often waived or reduced because the guarantee provides additional security
Some lender-specific policies: A small number of lenders have policies that do not require genuine savings at any LVR, though these are typically higher-rate products

Explore Your Deposit Options

Understanding genuine savings is one piece of the deposit puzzle. The deposit options guide covers the full picture — from 5% to 20% deposit strategies, government schemes, and professional waivers that can dramatically reduce the amount you need upfront.

If you are a qualifying professional, you may be able to buy with a 10% deposit and no LMI — even if part of your deposit comes from non-genuine-savings sources. The key is matching the right lender to your specific situation.

Frequently Asked Questions

How long do I need to hold genuine savings?

Most lenders require a minimum of three months of consistent savings history. Some lenders require five months. The savings need to be held in an account in your name (or a joint account), and you need to provide bank statements covering the entire period.

Does my partner’s savings count?

If you are applying jointly, both applicants’ savings can be combined to meet the genuine savings requirement. Each person’s savings should be in accounts in their own name (or joint accounts), and both will need to provide bank statements.

Can I use the First Home Super Saver Scheme for genuine savings?

Funds withdrawn under the FHSSS are generally accepted as genuine savings by most lenders, provided you can document the voluntary contributions and the ATO withdrawal. The contributions were made from your income over time, which satisfies the savings discipline test.

What if I have been living at home and not paying rent?

Living at home is not a barrier to demonstrating genuine savings. In fact, it often works in your favour — you have lower living expenses, which should make it easier to show a strong savings pattern. Lenders will still assess your bank statements for the three-month savings trail.

What if I received a gift and it is already in my account?

If a gift was deposited into your account more than three months ago and your savings have grown since then, the lender will look at the post-gift savings trajectory. The gift itself does not count as genuine savings, but your savings on top of the gift do. Be prepared to provide a statutory declaration from the gift-giver explaining the deposit.

Can I use rent payments instead of savings?

A small number of lenders accept a consistent rental payment history (typically 6 to 12 months) as an alternative to traditional genuine savings. This is not standard across the industry, so you will need to work with a broker who knows which lenders offer this flexibility.

Do lenders check all my bank accounts?

Lenders will ask for statements from all accounts where your deposit funds are held. They may also ask for statements from your everyday transaction account to assess your spending habits and overall financial position. It is standard practice to provide full disclosure of your financial accounts as part of the application.

What happens if I do not meet the genuine savings requirement?

If you cannot demonstrate genuine savings, your application may be declined or you may need to explore alternative options: a guarantor loan, a lender with more flexible policies, or waiting until you have built a three-month savings trail. A specialist broker can help identify the best path forward based on your specific circumstances.