Deposit Bonds


What is a deposit bond?

Deposit bonds work as insurance policies when you don’t have enough money readily available to pay a deposit. The insurance company guarantees the vendor that he/she will receive the 10% deposit even if the purchaser defaults on the contract of sale.

When can a deposit bond be used?

  • When you have your money invested in shares or fixed term deposits and you want to continue earning interest
  • By using deposit  bonds you can avoid bridging finance and expensive delays
  • Could enable buying “off the plan”
  • Can also be used at auction
  • When for example you need a 10% deposit, but you only have a 5% deposit  savings and you have been approved for a home loan of 95% of the purchase price
  • When you are borrowing 100% of the property and are using equity from another property for a deposit and you don’t have cash available to use as a deposit

Do vendors accept deposit bonds?

It is up to the vendors to decide if they would accepts deposit bonds or not, however most vendors and agents would accept them. You definitely need to check and you need prior consent to use them at auction.

Call First Stop Lending on 1300 657 773 or email us on

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