How does a deposit bond work?

A deposit bond is a substitute for the cash deposit required when purchasing a residential property. You simply pay the full purchase price at settlement. We partner with home buyers, property investors, mortgage brokers, lenders, conveyancers and developers to provide deposit bonds for you or your clients.

Here’s how they work

• Like a cash deposit, a deposit bond guarantees the commitment of a purchaser to an unconditional contract of sale.
• A deposit bond provides a level of comfort to the vendor that the contract of sale will proceed.
• Should the contract not proceed, due to default by the purchaser, the vendor can claim payment for the amount of the deposit bond.

Deposit bonds are a smart alternative to cash deposit

There are many reasons why you could benefit from a deposit bond:

• Borrowing 100% of the purchase price with the loan funds only available at settlement
• Purchasers who do not have the cash deposit when entering into a contract of sale
• Purchasers or investors who have their assets tied up in property and are cash poor
• Buying and selling simultaneously

How much can a deposit bond be issued for?

Like a cash deposit, a deposit bond may be issued to guarantee up to 10% of the property purchase price.

Are deposit bonds safe?

Yes! Here’s why:

Deposit Assure bonds are underwritten by QBE Insurance (Australia) Limited.  QBE is one of Australia’s largest insurers and is rated A+ by leading international credit rating agencies.

This means that a vendor can accept a Deposit Assure bond, with the comfort of knowing they are safe and reliable in the event they need to make a claim.

We strongly recommend any prospective homebuyer to get confirmation from the vendor that a deposit bond is acceptable in place of cash. This might be noted on the contract or in writing from the vendor or their legal representative.

How to apply and use a deposit bond?

Contact us now to get your application started.