If you've been told to 'have your deposit ready', the next question is always the same: does this count? Getting it wrong is the most common reason buyers are declined late.
If you've been told to "have your deposit ready", the next question is always the same one: does this count?
Getting it wrong is the single most common reason a first home buyer discovers, a few weeks before settlement, that the savings they thought were good enough aren't.
Why the rule exists
Every deposit in Australia is assumed by lenders to be at least partly borrowed from a parent or a mate, because that is what happens often enough to matter. The lender can't tell without asking, so they ask. "Genuine savings" is the answer to that question — not a moral judgement about your family.
What counts
| Source of the money | Counts? | What the lender wants to see |
|---|---|---|
| Your own savings, paid in regularly | Yes | Regular transfers, visible over 3 months or more, from an account in your name |
| Bonus or tax refund, kept separately | Yes | The payment statement and a separate account with the funds sitting in it |
| Superannuation via First Home Super Saver | Yes | ATO determination showing the withdrawal is approved for your purchase |
| Sale of something you owned — car, shares, an old ring | Usually | Sale notice plus the funds sitting in your account, separate from your day-to-day spending |
| Inheritance or bequest | Usually | Probate papers or the executor's confirmation, and the funds banked separately |
| A gift from family | Depends | Lender-specific. Some accept fully, some accept part, some reject. A written gift declaration is usually required either way |
| Borrowing from family or friends | No | That's exactly what "genuine" rules out. There's an exception for family gifts, but not for family loans |
| Redraw on your home loan | No | Some lenders exclude redeposited funds entirely |
The three ways people get caught
1. The money was in your account, but moving through it
Lenders trace the source. If your deposit arrived a week before you applied and has been cycling through your everyday account since, it looks borrowed. Money that has sat in a separate account, untouched, for months is unambiguously yours.
Practical fix: open a separate account now. Automate a transfer you can genuinely afford. Three months from now, that account is your evidence.
2. They split the deposit between savings and a gift
This is the most common real-world situation and the messiest one. Your broker can usually structure it — some of it as your deposit, some as a documented gift that only counts if the loan needs topping up at settlement. But you have to raise it before you apply, not after you're conditionally approved.
The question to ask your broker first
"If my deposit is $45,000 and I have $30,000 of my own savings, what do you need to see for the other $15,000?"
Get the answer in writing before you submit anything. Different lenders have genuinely different rules here and "it depends" is not good enough when you're five weeks from settlement.
3. They're using the 5% scheme and didn't know about genuine savings at all
The federal 5% Deposit Scheme requires genuine savings. A borrower who has saved diligently for two years, has the money in the bank, and still gets declined on the genuine savings test has usually made this mistake.
The single most common version: all the savings are in one account that also pays their rent and groceries. Lenders want to see savings behaviour, not just a balance.
How much do you actually need?
Under the 5% scheme, the deposit is 5% of the price. Most lenders still want your deposit to be a genuine deposit, so the same evidence is required whether you have 5% or 20%.
What to do this week
- Open a separate savings account today, in your name only.
- Set up an automatic transfer of an amount you actually can sustain. $50 a week is better than $300 that fails in month two.
- Keep it there. Three months is the usual minimum. Six is safer.
- Ask your broker about the gift question if you're contemplating family help — before you apply, not after.
- Get three payslips and two tax returns ready. You'll need them regardless of the deposit question.
What it looks like when it's done right
A first home buyer in Adelaide, saving for eight months:
That buyer took the extra six weeks to set up the separate accounts and get the gift documented. That six weeks is why their approval came through.
We publish general information, not legal or financial advice. Off-the-plan contracts, conveyancing and settlement law vary by state and by individual circumstances. Always have your own independent legal adviser review any contract before you sign — the cost is trivial against the risk. Found something wrong? Tell us.