Genuine savings and deposit sources: what lenders look for

“How much deposit do I need?” is the question everyone asks. The question lenders ask is different: where did it come from, and how long has it been there? A deposit is not just a number. It is evidence — about how you manage money, and about whether the funds are really yours to use. Understanding how that evidence is read, before you apply, saves a lot of last-minute scrambling.

What “genuine savings” means

Most lenders have a concept of genuine savings: money you have accumulated yourself, over time, and held in your own name. A typical policy asks for a portion of the purchase price to have been held (or built up) over a minimum period — the exact percentage and the exact period vary by lender and by product, which is why a broker checks the policy rather than assuming it.

What usually counts as genuine savings: regular deposits into a savings account over months, term deposits, shares you have held for a while, and — with some lenders — a history of paying rent on time (rental ledgers), because it demonstrates the same discipline.

What usually does not count on its own: a lump sum that appeared last week, a tax refund, a bonus, proceeds of selling a car, or money that has only just been gifted. Those funds can still be used for the purchase; they simply may not satisfy the genuine-savings test by themselves. The distinction matters because it decides which lenders and which loan products are open to you.

Deposit source 1: saved over time

The simplest and most flexible source. The lender sees a pattern — money going in, staying in, growing — across your statements. Practical points: keep the savings in an account in your name, avoid large unexplained transfers in and out in the months before you apply, and be able to explain any one-off deposits. A clean, boring statement history is an asset.

Deposit source 2: gifted, with a letter

Family help is common and completely legitimate. Lenders will usually want a gift letter (or statutory declaration) from the person giving the money confirming it is a gift, not a loan, and that no repayment is expected. Some lenders will also want to see the funds in your account for a period before they treat them as yours, and some will still ask for a separate genuine-savings component on top of the gift. Again: which rule applies depends on the lender, so the gift should be discussed with the broker before it lands in your account, not after.

Deposit source 3: released from equity

If you already own property, equity — the difference between what the property is worth and what you owe — can fund the deposit on the next one, usually through a refinance or a separate loan secured against the existing property. The lender will value the existing property, apply its own lending limits, and assess whether your income supports both loans. Equity is powerful because it lets you buy without selling, but it also means both properties are now part of one borrowing position. That is a plan decision, not just a deposit decision.

Other sources worth asking about

There are government schemes and programs from time to time that can help with deposits or with saving for one, and their eligibility rules and availability change. We do not summarise them here because the detail dates quickly — ask your broker what is currently available and whether you qualify.

Why this is a plan question

Where the deposit comes from shapes which lenders you can use, how much you can borrow, whether you pay for lenders mortgage insurance, and how the next purchase after this one will be funded. At TNC Group, that conversation with a mortgage broker sits in the Strategise and Plan steps — before the property search — so the deposit is arranged in a way that serves the whole plan, not just this one purchase.

Want the deposit conversation sorted before you look? Book a free 15-minute call — book here — or visit www.tncgroup.com.au.

General information only. This is not credit, financial, legal or tax advice. Lender policies vary and change — speak to a licensed mortgage broker about your situation.