Deposit Bond

A Deposit Bond is a certificate, issued by Aussie Bonds Australia on behalf of Insurance, that is held by the vendor instead of a cash deposit or a bank guarantee to secure the Contract of Sale. It acts as a guarantee to the vendor of the deposit payment. At settlement, the purchaser pays 100% of the purchase price, as no cash has been paid upfront.

Deposit Bonds have been around since 1989 and replaced the cumbersome process of organising bridging finance. They are widely accepted and trusted throughout Australia as a means of securing a property purchase; are legal in every State and Territory; and can be issued for all or part of the deposit amount required, up to a maximum of 10% of the purchase price of the selected property.

Deposit Bonds can be issued to secure most types of properties with settlement terms to match the needs of the purchaser. Settlement terms range from min. 3 months to 66 months.

Most property purchases settle within 6 months or sooner, but there are many other situations that require a longer settlement term, such as properties with a delayed settlement and off-the-plan purchases.

They are economical with only a one-off upfront bond fee. That’s it!

The bond fee varies depending on the term of the deposit bond and the amount required.

The bond fee for a short-term deposit bond is only 1.15% of the deposit amount. So, the bond fee for a deposit amount of $50,000 will only be $575.