Genuine savings for a low deposit home loan
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. Lender policies vary and change, so treat the ranges here as general practice rather than a rule.
This guide covers when the test actually applies, what counts and what does not, whether rent can stand in for savings, how long it realistically takes to build, and what lenders look for in your bank statements. For the wider deposit picture see our deposit options guide.
The short version: Genuine savings generally means 5% of the purchase price held in your own account for at least three months. It usually only applies once you are borrowing above 85% to 90% of the property value, and the exact threshold differs by lender. Rent counts at most lenders now. Gifts generally do not, on their own.
What are genuine savings?
Genuine savings are funds you accumulated yourself and held in your own name, generally 5% of the purchase price kept in your account for at least three months. The test is about the pattern of saving, not the balance.
Lenders use it as a behavioural check. Someone who has set money aside consistently for months has already demonstrated the habit a mortgage requires. Someone holding the same amount from a single windfall has not.
The 5% is measured against the purchase price, excluding government fees, duties and charges. On a $800,000 purchase that is $40,000, not 5% of your deposit.
The three-month clock starts from your first regular deposit, not the day you open the account. If you are 6 to 12 months out from buying, opening a dedicated savings account today and directing a fixed amount into it each pay cycle starts the clock immediately.
Do you actually need genuine savings?
Not always. The test generally applies once you are borrowing above 85% to 90% of the property value. Below that threshold most lenders do not examine the source of your deposit in the same way, because the deposit itself provides enough security.
The exact trigger point varies. Some lenders start applying the test above 85% LVR, others not until above 90%. That difference matters if you are sitting close to the line, because the same application can be assessed very differently depending on where it is lodged.
If you are using the Australian Government 5% Deposit Scheme, you are borrowing 95%, so you sit above every lender's threshold and the test will apply. Worth being clear that this is lender policy, not a scheme rule. Housing Australia sets the scheme criteria, and each participating lender applies its own credit policy on top.
Understanding your Loan to Value Ratio tells you which side of the line you are on. The property deposit calculator models it.
What counts as genuine savings?
Generally accepted
Funds held in a savings, offset or term deposit account in your own name for three months or more, with regular deposits showing accumulation. Shares or managed funds held for at least three months, though some lenders discount these to around 80% of their value rather than counting them in full. And a release under the First Home Super Saver Scheme, which lenders treat well because salary sacrifice over years is exactly the behaviour the test is looking for.
You can usually combine sources. Savings in the bank, a FHSS release and shares held long enough can be added together to reach the 5%.
Sometimes accepted
A gift from family is accepted by some lenders, but usually only alongside genuine savings of your own, and a signed statutory declaration confirming the money is a gift and not a loan is normally required. Regular contractual bonuses may count where you can show a pattern over a couple of years. Inheritance funds can qualify once they have sat in your account for three months, often with estate documentation. Policies on all three vary considerably.
Generally not accepted
A cash gift received in the last three months, because it shows nothing about your saving. A recent tax refund, for the same reason. Borrowed funds, including a personal loan or a credit card cash advance, which are not accepted anywhere. Proceeds from selling a car, jewellery or similar. And gambling or lottery winnings, which raise separate concerns in a responsible lending assessment.
Can rent count as genuine savings?
Yes, at most lenders now. A consistent history of on-time rental payments is widely accepted as evidence you can service a debt, which is the same thing genuine savings is meant to prove.
Requirements differ. Some lenders want 6 to 12 months of on-time payments, and many want the tenancy managed through a licensed property manager so the ledger can be verified. A private arrangement with a family member or a landlord who does not issue statements is harder to evidence. Some lenders will accept a shorter history, and some will accept a gifted deposit combined with rental history where neither would be enough on its own.
This is the single most useful thing for renters to know. If your deposit is real but has not sat in an account for three months, your rental ledger may solve the problem outright. It is worth asking before you assume you need to wait.
How much genuine savings do you need?
Where the test applies, expect to evidence 5% of the purchase price. On a $650,000 apartment that is $32,500. On an $800,000 home it is $40,000.
The strongest position is the full 5% from your own savings, which every lender accepts. Some lenders will accept a smaller proportion from genuine savings with a family gift covering the rest, provided the gift is documented. That flexibility varies widely, which is why lender choice does real work here.
Because a FHSS release is treated as genuine savings, buyers who have been salary sacrificing can often reach the threshold faster than their bank balance alone suggests. The scheme allows $15,000 in any one financial year and $50,000 across your lifetime. Contributions go in taxed at 15% rather than your marginal rate, and the released amount is taxed at your marginal rate less a 30% offset. Speak with your accountant before you start.
What do lenders look for in your bank statements?
Lenders read your statements as closely as they read your balance. A strong savings figure sitting alongside problematic spending will not carry an application on its own.
What they are checking for:
- Gambling transactions, including sports betting and online casino accounts
- Buy now pay later accounts, which are treated as commitments and reduce your borrowing capacity
- Overdrawn accounts, dishonoured direct debits and late payment fees
- Undisclosed debts, meaning repayments leaving your account that did not appear on your application
- Discretionary spending well above what you declared as living expenses
- Large unexplained deposits, which need a paper trail
If your statements currently show any of these, the fix is time rather than explanation. Close buy now pay later accounts, stop the gambling transactions, and build three to six months of clean statements before you apply. That period runs in parallel with your genuine savings clock, so it costs you nothing to start now.
How do you build genuine savings?
Automate it
An automatic transfer into a dedicated savings account on every payday is the single most effective approach, because it creates exactly the pattern lenders look for. A separate account also makes the history easy to evidence, rather than asking an assessor to pick savings out of a transaction account.
Use a high interest account
Ongoing rates above 5% have been available through 2026, with higher introductory rates on some accounts. Bonus interest usually depends on meeting a monthly deposit condition and making no withdrawals, which conveniently rewards the same behaviour the genuine savings test measures. Interest earned in the account forms part of your savings.
Salary sacrifice into super
The First Home Super Saver Scheme lets you build the deposit inside super at a lower tax rate. Reaching the $50,000 lifetime cap takes at least four financial years at $15,000 a year. Request your determination from the ATO before you sign a contract, because a release cannot be backdated.
Combine the two
Salary sacrificing while also saving into a high interest account builds the deposit faster than either alone, and gives you two forms of evidence. Both count towards the 5%.
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How long does it take to save a 5% deposit?
At $1,000 a fortnight, a 5% deposit on an $800,000 Sydney home takes about a year and a half. At $500 a fortnight it takes closer to three years.
| Deposit target | $500 a fortnight | $1,000 a fortnight | $1,500 a fortnight |
|---|---|---|---|
| $32,500 5% of $650,000 |
2 years 6 months | 1 year 3 months | 10 months |
| $40,000 5% of $800,000 |
3 years 1 month | 1 year 6 months | 1 year |
| $47,500 5% of $950,000 |
3 years 8 months | 1 year 10 months | 1 year 3 months |
| $60,000 5% of $1,200,000 |
4 years 7 months | 2 years 4 months | 1 year 6 months |
Contributions only, before interest. A high interest account shortens each of these. Price points reflect realistic Sydney entry levels, and $800,000 is worth noting because it is also the NSW stamp duty exemption threshold.
Two things shorten the timeline. A FHSS release counts towards the 5%, so salary sacrifice runs alongside the table above rather than instead of it. And if you are renting with a clean ledger, you may not need to wait for the three-month hold at all.
Common problems and how to fix them
You have the money but it is not genuine savings
Money from a car sale, a bonus or a gift sitting in your account does not yet qualify. Deposit it into a dedicated savings account, add regular contributions on top, and wait three months. If you are renting, ask about rental history first, because it may remove the wait entirely.
Only one applicant has a savings history
Most lenders accept genuine savings from either applicant on a joint application. Both sets of bank statements are still assessed for spending and serviceability, so the non-saving applicant's account still needs to look sensible.
Your savings are spread across several accounts
Consolidate into one dedicated account, keep statements from all of them to evidence the accumulation, and allow three months in the consolidated position before applying for pre-approval.
Your balance goes up and down
Lenders prefer to see steady growth. Genuine reasons for movement, such as an annual insurance premium or quarterly bills, are fine if you can explain them. A separate account showing uninterrupted growth alongside your everyday account is the cleanest way to present it.
Frequently asked questions
How much genuine savings do I need?
Generally 5% of the purchase price, excluding government fees, duties and charges, held in your own account for at least three months. On an $800,000 purchase that is $40,000. The requirement usually only applies once you are borrowing above 85% to 90% of the property value.
Can rent count as genuine savings?
Yes, at most lenders. A history of on-time rental payments is widely accepted as evidence you can service a debt. Requirements vary, but expect to need 6 to 12 months of payments, often through a licensed property manager so the ledger can be verified. Some lenders accept a shorter history, and some accept rental history combined with a gifted deposit.
Can I use money I have saved in cash at home?
No. Lenders need a paper trail through bank statements, and cash cannot be verified. Deposit it into a savings account and hold it for at least three months before applying. If you are renting, your rental history may be a faster route.
Can I use a cash gift from family?
A gift can form part of your deposit, but on its own it usually will not satisfy the genuine savings test because it shows nothing about your saving. Some lenders accept a gift alongside genuine savings of your own, with a signed statutory declaration confirming it is a gift and not a loan. Policies vary widely on this.
What if I have been living rent-free with family and saving my salary?
That is a strong position. Regular salary deposits with minimal withdrawals is exactly the pattern lenders want, and low living expenses help your serviceability too. Just be aware you will not have a rental ledger to fall back on, so the three-month holding period matters more for you.
Do both partners need genuine savings when applying jointly?
No. Most lenders accept genuine savings from either applicant. Both sets of statements are still reviewed for spending patterns and serviceability, so the non-saving applicant still needs to show responsible account conduct.
Can I use funds from selling cryptocurrency?
It depends on the lender. Most want evidence of how you acquired it, the funds converted to Australian dollars, and the proceeds held in a bank account for at least three months. Some lenders are more comfortable with this than others.
What is the minimum holding period?
Three months at most lenders, measured from your first regular deposit rather than the day the account opened, through to when you lodge your application. A small number of lenders are more flexible, particularly where rental history supports the application.
Next steps
Once your deposit is in order, look at the Australian Government 5% Deposit Scheme for a 5% purchase with no LMI, or Help to Buy if a 2% deposit and a smaller loan suit you better. Read the benefits and risks of a low deposit purchase before deciding, and check the NSW stamp duty exemption and the $10,000 First Home Owner Grant.
Calculators: property deposit, home equity and mortgage repayment. Then the pre-approval to settlement guide for what happens next.
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Related resources
5% Deposit Scheme guide | Benefits and risks of a low deposit | First Home Super Saver | Deposit options | Loan to Value Ratio | Budgeting guide | Pathways to home ownership
Service areas: 220+ suburbs across Sydney including Ryde | Parramatta | Baulkham Hills | Gladesville | Penrith | Chatswood | Castle Hill | Epping | Hornsby | Blacktown | Bankstown | Hurstville | Sutherland | Manly | Bondi | Sydney CBD and more
This article is general information only and does not take your personal circumstances into account. Genuine savings definitions, LVR thresholds, holding periods and rental history policies vary between lenders and change over time, so confirm your position with a licensed broker or lender before relying on them. For tax questions, including the First Home Super Saver Scheme, speak with your accountant. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
A clear and practical guide to building genuine savings for first home buyers.
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