Genuine Savings vs Funds to Complete

Genuine Savings vs Funds to Complete

The two concepts

Funds to complete is the total cash required to settle a property purchase. This includes:

• The deposit (typically 5–20% of the purchase price)
• Stamp duty (varies by state, first home buyer concessions may apply)
• Legal and conveyancing fees
• Building and pest inspection
• Any other transaction costs

The deposit alone is not sufficient — funds to complete are the full amount needed by settlement day.

Genuine savings is a specific subset of funds to complete. It refers to funds that have been accumulated over time through the borrower's own efforts — regular savings from income, gradual accumulation in a bank account. Lenders treat genuine savings more favourably because they demonstrate a pattern of financial discipline that correlates with lower default rates.

What qualifies as genuine savings

At most lenders, genuine savings means funds that have been held in a bank account in the borrower's name for a minimum of three months, with visible accumulation over that period. The three-month bank statement showing gradual savings growth is the standard evidence.

Regular contributions to a savings account, managed fund, or term deposit (where accessible) are generally accepted.

What does not automatically qualify

The following sources are not automatically treated as genuine savings:

• Gifts from family members
• Tax refunds
• Inheritance proceeds
• Lump sum payments from asset sales
• Any large windfall amounts

These may be accepted as funds to complete — that is, they can form part of the deposit — but they may not satisfy the genuine savings requirement at lenders who require it. Some lenders require that gift funds are held for a period (often 3 months) before they are treated as genuine savings.

Gift funds: what lenders require

Gifts require a signed gift letter confirming the amount is non-repayable and will not be returned. The gift typically needs to come from an immediate family member (some lenders restrict to parents). Some lenders require the gift to already be in the borrower's account before application. The gift letter template requirements vary by lender.

Rental history as an alternative pathway

At some lenders, a borrower who has a consistent rental payment history (evidenced by a rental ledger from a property manager) can use that history as an alternative to 3 months of genuine savings. The rationale: consistent rent payment demonstrates the same financial discipline that genuine savings demonstrates. Not all lenders accept this alternative — it is policy-dependent.

When genuine savings requirements apply

Genuine savings requirements are most commonly applied when the LVR is 85% or above. At lower LVRs, genuine savings requirements are often relaxed or waived entirely. The specific threshold varies by lender.