Genuine Savings vs Funds to Complete
In Australian lending, having the money is not the same as proving financial discipline.
The lending system distinguishes between genuine savings and funds to complete, and confusing the two is a common cause of unexpected declines or delays — particularly for high-LVR borrowers.
What Are Funds to Complete?
Funds to complete are the total cash required to settle a transaction, including:
- deposit
- stamp duty
- legal costs
- lender fees
- adjustments at settlement
If you can show the money exists, funds to complete are usually satisfied.
What Are Genuine Savings?
Genuine savings are a behavioural test, not a balance test.
They are typically defined as:
- savings accumulated over time
- held for a minimum period (commonly three months)
- showing a pattern of financial discipline
Genuine savings are most often required when:
- borrowing at high LVRs
- using LMI or government guarantees
- entering the market with minimal equity
Why the System Separates the Two
From a lender’s perspective:
- funds to complete confirm capacity to transact
- genuine savings predict repayment behaviour under stress
A borrower can have the cash to settle but still fail the discipline test.
Gifted Funds and Equity
Gifted funds:
- may count as funds to complete
- do not automatically count as genuine savings
Some lenders allow:
- partial substitution with rent history or savings patterns
- guarantor structures to bypass genuine savings requirements
These are policy overlays — not core rules.
Common Misunderstandings
Borrowers are often surprised because:
- a large gift does not remove genuine savings rules
- selling assets does not always satisfy seasoning requirements
- genuine savings can be required even when cash is available