Savings: The Foundation of Your First Home Deposit
Buying your first home starts earlier than most people think, and speaking with a broker upfront can save you a lot of confusion, time and potential heart ache later down the road. Your broker will explain how your savings are assessed, what lenders look for, and any blind spots you may not be aware of. With that clarity, building your deposit becomes far less overwhelming.
Saving for a deposit doesn’t have to be extreme, perfect or stressful.
It just needs to be steady and intentional.
This week, we’re breaking down what savings actually mean in the home-loan world, how “genuine savings” really works, and the small changes that make the biggest difference.
What Your Savings Really Show Lenders
When you’re buying your first home, lenders aren’t just looking at the amount in your account, they also look at the story behind your money. A healthy savings habit tells them you can manage money consistently which helps them feel confident lending to you. But here’s the part that confuses almost every first home buyer:
Your savings balance and your genuine savings are not the same thing.
Genuine Savings Explained Simply
Genuine savings is money you have saved yourself over time.
Small amounts you’ve put aside regularly that have been sitting in your account and growing.
This is the part lenders use to see your savings pattern.
Examples of what counts as genuine savings
• Weekly or fortnightly transfers you’ve made yourself
• Money that has accumulated steadily over a few months
• Regular deposits that show a pattern
What doesn’t count as genuine savings
These still help fund your deposit, but they are not genuine savings on their own:
• a gift
• an amount you transferred from another account yesterday
• a lump-sum deposit that appeared suddenly
Again, these are still fine to use for your deposit they just don’t demonstrate a pattern.
Most lenders want to see around 5 percent of the purchase price as genuine savings.
Real Life Example of Genuine Savings
Let’s imagine Mia wants to buy her first home for $500,000.
Most lenders want to see around 5 percent genuine savings. For Mia, that means she needs about $25,000 that she has saved herself over time.
Here is what she has:
- $20,000 she has saved slowly from her weekly pay over the past year
- $10,000 she transferred in from another account last week
Her total savings are $30,000, which is great, but only part of it counts as genuine savings.
Here is how a lender looks at it:
- The $20,000 she saved steadily is genuine savings because it shows a clear pattern
- The $10,000 lump sum still forms part of her deposit, but most lenders will only treat it as genuine savings if it has been held in her account for at least three months or saved steadily over time.
Right now, Mia has $20,000 in genuine savings. She needs $25,000, so she only has $5,000 left to go.
This is just one simple example of how a first home buyer can build a deposit and why understanding genuine savings early makes such a big difference. When we work with clients, we explain these rules right from the start so they know exactly what lenders look for and how to prepare. The earlier you understand the process, the smoother your path to preapproval becomes.
So Why Does This Matter for You?
Because once you understand the difference, saving for your first home becomes far less confusing. You don’t need huge lump sums or a perfect spreadsheet, you just need a simple, steady habit that shows you can save consistently.
The Hard Part: Life Is Expensive Right Now
Saving isn’t easy. Groceries are up. Rent is up. Bills are up.
So the goal isn’t to overhaul your life.
It’s to make small changes that actually stick.
Here are the saving strategies that can help FHBs:
Practical, Real-Life Savings Tips That Actually Help
1. Automate it before you see it
Set up a small transfer the moment you get paid. Even ten or twenty dollars builds the habit without relying on willpower.
2. Cancel one subscription you barely use
Most people forget about at least one. Cancel it and redirect that money straight into savings.
3. Keep your deposit savings in a separate bank
Not just a separate account. A separate bank. This creates distance, less temptation and fewer moments where money gets moved back and forth.
4. Name your savings account “Home Deposit”
Your brain treats labelled money differently. It sounds simple, but it works.
5. Choose a high interest savings account
A higher rate helps your deposit grow faster without you doing anything extra.
6. Avoid buy now pay later services
Even small instalments reduce borrowing power and slow down your savings progress.
7. Put unexpected money straight into savings
A refund, a bonus or selling something small can all go straight into your deposit. It builds faster than you expect.
8. Keep lifestyle upgrades on pause until after settlement
New subscriptions or new tech can wait. Holding steady now keeps your savings strong and protects your borrowing power.
The Big Takeaway
Your home deposit is built from habits, not heroics.
A small, steady savings pattern is more powerful, and more valuable to lenders, than one big lump sum.
You’re not expected to be perfect.
You’re expected to be consistent.
And you’re already closer than you think.
Licensing statement: Rayne Finance ABN [70 605 100 838] is authorised under LMG Broker Services Pty Ltd Australian Credit Licence 517192. Disclaimer: (1) As with any financial scenario there are risks involved. This information provides an overview or summary only and it should not be considered a comprehensive analysis. You should, before acting in reliance upon this information, seek independent professional lending or taxation advice as appropriate and specific to your objectives, financial circumstances or needs. This publication is provided on the terms and understanding that: (2) LMG Broker Services Pty Ltd, Rayne Finance (Seed Lending Pty Ltd) and the authors, consultants and editors are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication. (3) LMG Broker Services Pty Ltd, Rayne Finance (Seed Lending Pty Ltd) and the authors, consultants and editors, expressly disclaim all and any liability and responsibility to the maximum extent permitted by the law to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication.
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