What is genuine savings?

Genuine savings refers to funds you have accumulated genuinely and gradually over time — typically a period of three to six months — rather than money that arrived in a lump. It deliberately excludes gifts, tax refunds, inheritances, the proceeds from selling an asset such as your car, First Home Owner Grants and work bonuses. The point a lender is testing is not the size of your deposit on the day; it is the habit behind it.

This is a policy question, not a fixed rule. "Genuine savings" is one of the more fluid terms in lending, because each lender and each lenders mortgage insurance (LMI) provider applies its own definition and its own minimum holding period. So the real question is rarely "do I have genuine savings"; it is "which lender's definition fits the way I have actually built my deposit, and how should the application be structured around it."

Generally speaking, funds that count as genuine savings include:

There are exceptions in almost every direction. One lender will accept a government deposit scheme as genuine savings; another will treat it differently; some lenders do not require genuine savings at all. Where you cannot evidence the savings history a lender wants, that gap is sometimes priced as a higher interest rate rather than declined outright — which is exactly why the choice of lender matters. The early takeaway is straightforward: if you intend to buy, save consistently across at least a six-month window. You are demonstrating a habit of incrementally putting money aside, and that habit is what the policy is built to read.

Genuine savings versus regular savings, and gifts

Genuine savings differ from ordinary regular savings in form as much as in substance. As above, genuine savings can sit in term deposits, shares or similar investments — provided you have held them over time without significant withdrawals. It is the holding pattern, not just the balance, that does the work.

Gifts sit in a more nuanced position. Some lenders will treat a gift as genuine savings if it has been left untouched in your account for the required period, and the same can apply to an inheritance. A letter confirming the origin of the funds is often required. Keep in mind that LMI providers frequently apply stricter or simply different policies to banks on both genuine savings and the treatment of a gift, so the lender's view and the insurer's view can diverge on the same deposit.

Lenders ask for genuine savings because they are looking for evidence that you can service a loan. If you have not been able to save, or to lift your savings incrementally, that raises a fair question about your capacity to carry the repayments a mortgage imposes. The savings history is a proxy for repayment discipline — which is why structuring the application to evidence that discipline clearly is worth doing properly.

No-genuine-savings home loans

There are products that allow you to borrow without genuine savings, subject to conditions, and in some cases up to 95% of the property value. The conditions tend to be specific: the purchase is usually an established dwelling on under 2.2 hectares, the applicants have stable employment and a sound overall financial position, and the file is free of defaults or adverse credit listings. The fewer of those boxes you tick, the narrower the lender options become.

LMI on a no-genuine-savings loan cannot always be capitalised — that is, not every product lets you fold the insurance premium into the loan amount rather than paying it upfront. Only a small number of products permit that capitalisation cleanly, and where the structure otherwise fits, those tend to be the stronger options. Which lender suits depends on the detail of your circumstances, because the same deposit profile can fit one lender's policy and fall outside another's.

If genuine savings is the question standing between you and a purchase, it is worth mapping before you apply — which definition each relevant lender uses, how your deposit reads against it, and how to structure the application so the way you saved counts in your favour. Book a strategy session and we will work through where you genuinely stand.

General information only — not personal financial product or credit advice. Lending is subject to each lender's policy, your full circumstances and responsible-lending assessment. AeFin is an Australian Credit Representative (CR 464548) of Finsure (ACL 384704).