What is a deposit bond?
How it can help you
A deposit bond is lodged by an insurer on your behalf, to guarantee that you’ll pay the deposit at property settlement, instead of upfront. It’s a convenient option when you can’t immediately access funds for the deposit. Examples of this would be when your money is temporarily tied up in a term deposit, or in your present home prior to its settlement. ITP Home Loans can help you decide whether a deposit bond is right for you, and quickly and easily organise one if you decide to go ahead.
How it works
A deposit bond can be supplied for part or all of your deposit, up to 10% of the purchase price. It can be applied to both auctions and private treaty sales, for nearly all different types of properties and buyers. It also gives you the convenience of:
- Keeping your funds earning interest right up until settlement
- Allowing you to bid at multiple auctions
Plus it’s great for First Home Owner Grant buyers as the funds from the grant aren’t distributed until settlement time.
Standard vs. long term deposit bonds
A standard deposit bond is valid for a settlement period of up to 26 weeks. Longer term bonds, which are applicable for between 6 to 48 months, help buyers who are purchasing properties under construction, off the plan, or with extended settlements.
What do deposit bonds cost?
Your deposit bond fee is calculated on the value of the property and the length of time until settlement. It’ll work out to be at least 1.2% of the purchase price. If you don’t end up using it, it’s normally partly refundable.
Your friendly, professional ITP Home Loan advisor can help you decide whether to take up a deposit bond, plus get you a good deal on one quickly and easily. You can email us, or make an appointment to see an advisor face to face. Alternatively, give our helpful ITP Home Loans consultants a call today on 1300 387 487.