When you’re applying for a home loan, your prospective lender will look at a range of factors in determining your ability to service the loan. One of these is your genuine savings. Banks view genuine savings as a sign that you are a good borrower. Lenders want to see that you’ve planned and saved for a deposit yourself and are not reliant on other sources. Genuine savings give the lender an idea of how good you are at managing your money. Lenders typically ask for a minimum of 5% of the purchase price.

Genuine savings are what lenders describe as savings accumulated over a period of time. This type of savings is different from regular savings sitting your bank account. For savings to be considered ‘genuine’ they must be maintained.

Genuine saving considers

• Savings held for at least three months
•  Term deposits with terms lasting more than three months
• Equity from Existing Property.
• Rental payments: Some lenders consider Rental payments as genuine savings.
• Deposit has been held by the Builder, Developer or Real Estate Agent for more than 3
  months.

Not Consider Genuine savings

• Gifts letters
• Asset sales (such as a car)
• Tax refunds
• Work bonuses
• First home Grant  
• Borrowed Money.
• Money received from the sale of shares