Genuine Savings

Understanding Authentic Savings

Every lending institution has distinct guidelines regarding what constitutes authentic savings. Discover how to demonstrate authentic savings to a financial institution.

Defining Authentic Savings

Authentic savings refer to the funds a borrower has personally accumulated over a period, typically spanning a minimum of three months.

Transforming Your Deposit into Authentic Savings

Did you realise that any deposit can become authentic savings after a three-month period? It’s straightforward: place your funds in a savings account, contribute additional amounts each month for three months, and presto, it’s recognised as authentic savings.

Note: This does not include deposits obtained through borrowing.

Authentic Savings Estimator

Utilise OzBroker’s authentic savings estimator to ascertain the necessary amount of authentic savings and identify what types of funds are acknowledged as such by lenders.

What Qualifies as Authentic Savings?

  • Savings maintained in your account for a minimum of three months.
  • Equity from an existing asset.
  • Dividends or bonuses retained for three months.
  • Consistent rental payments.
  • Under certain circumstances, gifts, inheritances, or builder deposits, if held in your account for over three months, are accepted.

What Doesn’t Count as Authentic Savings?

  • Government incentives like the First Home Owner Grant (FHOG).
  • Projected savings or rent-to-own schemes.
  • Funds not stored in your account.
  • One-time financial gains.

Why Do Financial Institutions Demand Authentic Savings?

Banks consider authentic savings a testament to a borrower’s reliability. They prefer borrowers who have diligently saved for a deposit, indicating financial independence.

Minimum Requirement for Authentic Savings

Lenders often require a bare minimum of 5% of the property’s purchase price as authentic savings.

Builder Deposits as Authentic Savings

Some lenders regard deposits to builders as authentic savings, provided they meet specific criteria, such as a holding period exceeding three months and proof of the deposit’s non-borrowed origin.

Home Loans Without Authentic Savings

It is feasible to acquire a home loan without authentic savings. Here are some options:

  • Choosing lenders that do not mandate authentic savings.
  • Borrowing up to 95% of the property value.
  • Utilising a guarantor loan if no deposit is available.
  • Proving rental payments as a substitute for authentic savings.

Avoiding Non-Authentic Savings

Non-authentic savings, like sudden large deposits or fluctuating savings, may be viewed negatively by lenders. They suggest a lack of consistent saving habits.

Navigating Genuine Savings Requirements

The intricacies of authentic savings policies can be challenging. OzBroker can guide you through the nuances and help you make the most of your savings.

Maximizing Your Savings

To ensure your savings are recognized by lenders, follow these tips:

  • Maintain savings in your own account.
  • Avoid relying solely on loans from friends or family.
  • Consider international savings if you’re a recent migrant.
  • Analyze your saving and spending patterns.

Enhancing Your Home Loan Savings Proof

  • Establish a solid budget.Avoid impulsive spending.
  • Plan your meals and seek discounts.
  • Sell unused items.
  • Opt for repairing over replacing appliances.

Expert Assistance with OzBroker

Our team of experienced mortgage brokers can assist you in determining if your deposit qualifies as authentic savings and guide you through the loan application process without requiring authentic savings.

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