What Are the Best Ways to Build Genuine Savings?
Genuine savings refer to funds that you have personally saved over a period of time, usually at least three months. According to the mortgage specialists at FS Loan, showing a strong savings pattern can significantly improve your borrowing profile and approval chances.
Step 1: What Counts as Genuine Savings?
Genuine savings typically include money saved from your income, such as regular deposits into a savings account, term deposits, or consistent investment contributions. Lenders prefer to see a clear history of disciplined saving.
How much genuine savings do you need?
Most lenders require at least 5% of the purchase price to be demonstrated as genuine savings held for a minimum of 3 months.
Example: On a $600,000 property, $30,000 must be in your account and demonstrably yours. It cannot consist entirely of a family gift or First Home Owner Grant.
Some lenders accept a strong rental payment history as an alternative. Ask your broker which lenders are most flexible for your situation.
Use our Deposit Calculator.
Step 2: How Can I Build a Consistent Savings Habit?
Start by setting a fixed savings goal and automatically transferring a portion of your income into a separate account. Consistency is more important than large one-time deposits.
Step 3: Can Gifts or Grants Be Considered Genuine Savings?
In most cases, gifts and government grants are not classified as genuine savings on their own. However, they can still support your deposit when combined with your personal savings history.
