Preparing financially
Genuine savings, gifts and guarantors as a deposit source
What 'genuine savings' typically means to a lender, how gifted funds and guarantor arrangements are assessed, and the paper trail that makes each one credible.
- Genuine savings usually means funds accumulated over a period (often around three months), not a sudden lump sum.
- A clean rental payment history (commonly 6-12 months, via a licensed property manager) can substitute for some or all of it with some lenders.
- A signed gift letter and evidence of transfer are commonly required for gifted funds.
- A guarantor arrangement uses a family member's property as security — a materially different and riskier structure than a cash gift.
- Different lenders treat gifts, guarantors, inheritance and asset-sale proceeds differently.
What "genuine savings" usually means
Many lenders want to see a portion of your deposit — commonly at least 5% of the purchase price — held or accumulated over a period, often around three months, in your own name, rather than appearing as a lump sum immediately before you apply. Regular payslip deposits into a dedicated savings account are the clearest example; money that appears suddenly from an unclear source is more likely to be questioned.
A clean rental payment history can also be accepted in place of some or all of the genuine-savings requirement by some lenders — commonly 6 to 12 months of on-time payments, through a licensed property manager rather than a private or family arrangement, with your name matching the tenancy agreement. This varies significantly by lender and isn't accepted everywhere, so it's worth asking about directly if you've been renting rather than living rent-free.
Gifted funds
A gift from family is commonly accepted as part or all of a deposit, but lenders typically want a signed gift letter confirming the funds are a genuine gift — not a loan that must be repaid — and evidence the money has actually been transferred and held for a period before settlement. A gift can sometimes substitute for genuine savings entirely, depending on the lender and how much of the deposit it covers.
Guarantors
A guarantor (commonly a parent) uses the equity in their own property as additional security, which can let you borrow without genuine savings or LMI in some cases. This is a materially different — and riskier — arrangement than a cash gift: the guarantor's property is at risk if you default, and the arrangement should be understood in detail by everyone involved before proceeding. See the family guarantee guide for how the mechanics actually work.
Other accepted alternatives
Inheritance, proceeds from selling another asset, and funds accessed through an eligible government scheme can each be treated differently from ordinary genuine savings — ask your specific lender how each is assessed rather than assuming they're all treated the same way.
Practical checklist
Documenting your deposit source
- Keep a clear paper trail for any savings, gift or asset-sale funds
- If relying on rental history instead of savings, request a rental ledger or reference letter from your property manager well ahead of applying
- Prepare a signed gift letter well ahead of applying, if using gifted funds
- If considering a guarantor, read the family guarantee guide before committing anyone's property
- Ask your specific lender how they treat your particular deposit source
Relevant Delora tool
Questions for a professional
- Would my specific deposit source be accepted as genuine savings by the lenders you compare?
- What exactly needs to be in a gift letter for it to be accepted?