Genuine savings in a loan application

cairns mortgage brokers | Personal

If you are looking at purchasing property in Cairns, you probably know that there are a lot of options when it comes to choosing your home loan.  While one loan may offer the lowest interest rate, it may not be the most flexible in considering what counts as genuine savings. If you apply for a home loan, particularly if the loan is for more than 80 per cent of the value of the property, you’ll more than likely have to prove to lenders that you have a satisfactory amount of savings. This is to demonstrate your financial ability to funnel a portion of your income into repayments on your mortgage. 

Genuine savings

Although it can differ, in most cases lenders generally look for consistent financial additions to savings over a period of at least three months and preferably a year or more. This means that the following are not considered genuine savings:

  • a cash gift
  • an inheritance
  • casino/other gambling winnings
  • proceeds of the sale of a non-investment asset
  • government grants and other finance offered as incentives 

Can I still get a loan without genuine savings?

For those who don’t have any genuine savings but still want to obtain finance for a home loan, there are options. These are some of the loan options:

  • Guarantor loans - Having a guarantor on your loan may mean that no loan deposit is required, with the equity or asset the guarantor stakes standing in for a deposit.
  • Other significant assets such as shares, managed funds and/or equity in residential property - Depending on your chosen lender, cash isn’t the only thing accepted as genuine savings. There are even situations where the sale of a vehicle can be considered as genuine savings if proved that it was owned for three months or more.
  • A strong rental record may see a lender allow you to forgo the genuine savings route - Some lenders will waive the requirements if a letter can be produced from a licensed real estate agent confirming that rent has been paid on time and in full for the preceding 12 months, as it highlights your ability to make home loan repayments on time and on an ongoing basis. 

If you don’t have any genuine savings, don’t despair.  Speak to us at Preston Finance in Cairns.  We will take a look at your situation and help you to find a lender that has policies to suit you.  At Preston Finance, we have the knowledge and experience to do this and we maintain constant communication with lenders to know their policies well. We can compare different lenders and the home loans and find you a loan with the best interest rate. If you are thinking about buying a property and would like some help or advice on your home loan options, contact us at Preston Finance. 


Preston Finance

1/15 Spence St


07 4052 0750