Understanding genuine savings (and why lenders care).
When applying for a home loan in Australia, especially with a deposit under 20%, many lenders want to see something called genuine savings. It’s one of the most misunderstood parts of the lending process, and borrowers often don’t realise what counts, what doesn’t, and why it matters.
At Lumo, we help clients understand how genuine savings are assessed, how to meet the requirements even if you’re early in your savings journey, and which lenders are more flexible with their policies.
What are genuine savings?
Genuine savings are funds you have saved gradually over time and held in your name for a minimum period, usually three months.
The idea is to show lenders that you manage money consistently and can afford ongoing repayments.
Examples of genuine savings include:
Regular savings deposits into a savings account
Money held in a bank account for 3+ months
Term deposits held for 3+ months
Shares or managed funds held for 3+ months
Extra repayments in a redraw account (in some cases)
Genuine savings are less about the amount and more about demonstrating financial behaviour.
What doesn’t count as genuine savings
Some forms of money do not meet the genuine savings definition on their own, even if they help make up your deposit.
These include:
Gifts from family
First Home Buyer grants
Inheritance received recently
Tax refunds
Bonuses
Sale of a car or personal asset
Personal loans used as a deposit
Cryptocurrency gains (unless held >3 months and proven through statements)
These funds can still be used toward your deposit — they just may not satisfy the genuine savings requirement unless paired with the right lender.
How much genuine savings do you need?
Most lenders require you to show 5% of the property value as genuine savings when borrowing above 90% LVR.
For example:
Buying a $600,000 property → lenders may want to see $30,000 of genuine savings.
However, not all lenders follow this exact rule.
Lender differences: some are far more flexible
Not every bank assesses genuine savings the same way.
This is where lender selection becomes critical.
Examples of flexibility we see across different lenders:
Some accept rental history as genuine savings for long-term tenants.
Some accept consistent repayment behaviour, such as paying rent on time each month.
Some accept gifted deposits if the money has been held for a short period.
Some waive genuine savings entirely for strong income earners.
Some accept non-genuine savings (gifts, inheritance, bonuses) without restrictions.
Some allow waived genuine savings for high-credit-score borrowers.
This is why clients with the same deposit size can receive completely different outcomes depending on the bank.
Why lenders care about genuine savings
Genuine savings help lenders assess:
Your ability to manage money consistently
Your financial habits under normal conditions
Whether you have sufficient buffer for ongoing repayments
How you might behave through rate rises or unexpected expenses
It helps lenders see patterns, not just the balance in your account today.
What if you don’t meet the genuine savings requirement?
There are several pathways:
1. Choose a flexible lender
Some lenders don’t require genuine savings at all.
2. Use rental history
If you've rented for 12+ months and never missed a payment, this can sometimes replace genuine savings.
3. Build a small track record quickly
Holding funds for three months is often enough to meet the definition.
4. Consider buying with a guarantor
A guarantor loan can remove the need for genuine savings altogether.
5. Use lender niche policies
For example, some accept super withdrawals (FHSSS), tax returns, or bonuses if documented well.
We help clients find the fastest, simplest path based on their circumstances.
How to strengthen your position early
A few small steps make a big difference:
Keep your savings in one clear account
Make regular deposits, even small ones
Avoid sudden unexplained large transfers
Don’t move funds around during pre-approval
Keep evidence of consistent rent payments
Clarity makes lender assessment smoother and faster.
Let’s chat.
If you're unsure whether your savings qualify as genuine savings — or want help choosing a lender that suits your situation — we can map out the best strategy for you. Let’s chat.
This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.