Deposit Bonds

Essentially Deposit Bonds are a ‘promise to pay’ from the purchaser to the seller (vendor) and are often used in the following situations;

  • First home buyers that might have slightly less than 10% deposit but they have a home loan approved for their purchase
  • First home buyers who are getting a ‘parental loan’ to assist with their home purchase and so they dont have 10% deposit funds in cash
  • Mature age buyers that have all of their money tied up in equity in their current home ie/ they have little cash
  • People looking at Bridging Finance that are buying a property before the sale of their current home settles

The capital amount behind the Deposit Bond is covered by the loan amount from your lender, so at settlement part of the Home Loan proceeds will pay the Deposit Bond amount in cash to the vendor in replacement for the Bond.

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