What Genuine Savings Actually Means

Genuine savings is a term lenders use to describe funds you have accumulated yourself over a period of time, as opposed to money that appeared in your account recently from a sale, a windfall, or a last-minute transfer. It signals to a lender that you are capable of managing money consistently, which is what they want to see before lending you hundreds of thousands of dollars.

The standard benchmark is 5 per cent of the purchase price. That figure does not change between lenders, but what counts toward it, and how long it needs to have been sitting there, varies considerably.

How Different Lenders Treat Genuine Savings

This is where genuine savings gets complicated quickly, because lender policies sit across a wide spectrum. The table below shows the main categories you are likely to encounter, from the most flexible through to the most conservative.

Why the Table Shows a Range Rather Than One Rule

Genuine savings policy is set by each lender individually, and it interacts with their LMI provider’s requirements rather than following a single national standard. The insurer is ultimately the party most interested in your savings behaviour, since they are taking on the risk above 80 per cent LVR.

This means the same borrower with the same deposit can face a completely different assessment depending on which lender the application goes to. Finding the right match is the work of a broker, not a bank’s website.

When Genuine Savings Is Not Required

There are four clear situations where a genuine savings home loan assessment will not require you to prove a savings history, and understanding them can open up a much simpler path to approval.

Your deposit is 20 per cent or more

A deposit of 20 per cent brings your loan to value ratio to 80 per cent, which sits below the LMI threshold. Since genuine savings is primarily an LMI requirement, most lenders at this level simply confirm your funds exist rather than asking how long they have been there.

Your deposit is between 10 and 12 per cent with LMI

Some lenders apply a rule where, if your total deposit is in the 10 to 12 per cent range and LMI is being paid on top, the genuine savings requirement is waived. The logic is that the LMI premium itself signals the lender’s risk is covered, so the savings history requirement becomes less critical. This policy is lender specific and not universal, but it is worth checking with your broker before ruling out a purchase at a lower deposit.

Your LVR is at or below 85 per cent

A number of lenders only apply genuine savings rules for applications above 85 per cent LVR. A 15 per cent deposit may therefore remove the requirement entirely with the right lender, even though it does not avoid LMI altogether.

Your lender does not apply the requirement

Some smaller and non-bank lenders do not ask for genuine savings at all, regardless of LVR. These lenders typically carry a slightly higher interest rate to reflect the additional risk they are taking on. Whether that trade-off makes sense depends on your total cost over the loan term, which is a conversation worth having with your broker before you commit.

Government Scheme Buyers: LMI Waived, but Genuine Savings Still Required

If you are buying through the First Home Guarantee, the government guarantees up to 15 per cent of your deposit, which means you can purchase with just a 5 per cent deposit without paying Lenders Mortgage Insurance. This is one of the most significant cost savings available to eligible first home buyers.

However, that 5 per cent deposit still needs to meet genuine savings requirements with most participating lenders. The LMI waiver removes the insurance cost, but it does not remove the lender’s need to see that your deposit was built up over time rather than received at the last minute.

In practical terms, you still need to show your 5 per cent has been sitting in your account for the lender’s required period, typically 30 to 90 days, before your application is submitted. A family gift alone may not satisfy the genuine savings test with every lender on the scheme, so checking the specific policy of each participating lender is important before you commit.

We cover the First Home Guarantee and other government-backed purchasing options in detail in our guide to government schemes for first home buyers.

How Laxmi Home Loans Helps You Navigate Genuine Savings

Genuine savings is one of the most misunderstood criteria in the home loan process, particularly for borrowers who have built up funds in non-traditional ways, including savings held across multiple accounts, money set aside while paying rent, or a family gift that forms part of the deposit.

If you are searching for a mortgage broker near me who understands how savings actually work across different household situations, the Laxmi Home Loans team has helped more than 1,000 families across Australia navigate exactly this question. We serve clients in English, Nepali, and Hindi, and we have worked with borrowers at every stage of the savings journey, from those with a full 90 days of clean documented savings through to those who are relying on rental history or a family gift to make up the difference.

As an experienced Nepali mortgage broker based in Sydney and operating nationally, Kishor Acharya understands that savings habits differ across households, and that a one-size approach to documenting a deposit does not reflect the way many families actually build wealth. The goal is to match your specific deposit situation to the lender whose policy works in your favour, rather than asking you to change how you save to fit a lender’s preferred format.

We check your genuine savings position before we recommend a lender, not after. That single step avoids a declined application and the credit enquiry that comes with it.

You can learn more about how we work in our guide to offset accounts and redraw facilities, which explains how keeping funds in the right account structure can also strengthen your savings history for lender purposes.