Genuine Savings

5% genuine savings needs to be verified on all lenders mortgage insured loans where the base LVR (link to this topic in FAQ) exceeds 80%. Generally, the 5% will relate to the purchase price (or land plus construction costs for building loans). However for refinances or where unencumbered residential real estate is offered as security, the 5% will relate to the security value(s).

Demonstrated genuine savings behaviour provides evidence of the applicants’ capacity to service home loan repayments as well as their proven ability to meet regular commitment of home loan repayments. The genuine savings requirement is available from a few lenders and is very popular with first home buyers. If you are a first home buyer, come to our info sessions and get pampered with lots of assistance to help you on your journey to purchasing your golden patch in Australia.

Acceptable Forms of 5% Genuine Savings:

• Regular savings pattern building up to the required minimum 5%
• Savings statements showing the required 5% of purchase price have been held for a
• minimum period of three months
• Equity in real estate owned by applicants, where such real estate is offered as collateral security
• Other critera may apply

Unacceptable Forms of 5% Genuine Savings

• Gifts of any kind
• Proceeds of a personal loan or other borrowings
• Builders rebate / Incentive
• First Home Owner Grant (FHOG)
• Funds held in a business/company trading account

It is very important to note that the broker can negotiate a good interest rate if the client can prove genuine savings, especially for first home buyers. It is quite complicated for the client to get this right as the bank policies are very strict regarding genuine savings. We are very experienced with this type of lending and we will be able to guide and help you on your way to getting this set up correctly. For more information come to our info sessions for first home buyers.