Deposit Bonds

What is a Deposit Bond?

A deposit bond is a guarantee issued by an insurance company that can be used as a substitute for a cash deposit when purchasing a property, deferring the need to use our cash up front. Upon settlement of the property purchase you will be required to pay the full purchase price of the property and associated purchase costs.

To qualify for a deposit bond you need to show you are able to complete the purchase by one of the following methods:

Providing a copy of a loan approval that confirms you have access to sufficient funds to complete
Providing evidence that you own other properties with significant equity in them, as well as proving you have the financial capability to qualify for any loan required to complete the purchase.

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Types of deposit bonds

We can assist with both types of deposit bond:

Short term deposit bonds (6 months or less settlement period)
Long term deposit bonds (6-48 months settlement period)

In what situations are deposit bonds useful?

Some examples of when deposit bonds are typically used include:

You only have a 5% deposit and you have been approved for a 95% loan but the vendor of the property you are purchasing requires a 10% deposit
You are borrowing 100% of the purchase price using equity in another property you own or using a guarantor and you don’t have a 10% cash deposit available.
Your savings are tied up in shares and/or managed funds and you don’t want to sell them
Your savings are in a term deposit and you will incur a penalty if you break the term deposit early
You are purchasing an off the plan property with a long settlement period and you prefer to not use your savings to pay the deposit