Lenders will ask for evidence of what they term “genuine savings” when you apply for a home loan.

Genuine savings are funds that the potential borrower has saved gradually over a period of time, generally three to six months.
This gives the bank confidence that the prospective borrower can make regular payments consistently.

Each lender will have different requirements for genuine savings but generally, savings of 5% of the purchase price is required in the borrower’s account saved over at least three months.

So what is considered genuine savings?

– Savings held or accumulated over 3 months.
– Term deposits held for 3 months.
– Shares or managed funds held for 3 months.
– Equity in your current property
– Funds salary sacrificed under the First Home Super Saver Scheme

What isn’t considered genuine savings?

– Monetary gifts
– Inheritance
– Tax refund
– Proceeds from sale of assets (with the exception of property)
– Bonuses
– First Home Owners Grant (FHOG)
– Funds held in a business account
– Borrowed funds e.g. a personal loan
– Developer’s or builder’s rebates/incentives