What is a deposit bond?
A deposit bond is a financial guarantee used in place of a cash deposit when purchasing a property. It assures the seller that you will pay the full deposit amount at settlement — typically 5% or 10% of the purchase price.
At h2o Loans, we help you secure a deposit bond quickly so you can move forward with confidence — even if your cash isn’t immediately available.
Why would I use a deposit bond?
A deposit bond is a smart solution when you're ready to buy a property but don't have immediate access to cash for the deposit. It's a guarantee to the seller that you will pay the deposit amount at settlement — without needing to release funds upfront.
Common Situations Where Deposit Bonds Are Useful
Deposit bonds are often used by buyers who have their money tied up in shares, term deposits, or equity from an existing property sale. They're also ideal when settlement is delayed or funds won't be available until a later date.
- You've sold a property but haven't yet received settlement
- Your savings are in a fixed-term account or investment
- You're buying off-the-plan and don't want to use cash now
How h2o Loans Can Help
We make securing a deposit bond fast and easy. Our team will assess your eligibility, help you choose the right bond term, and manage the process with minimal paperwork — so you can focus on securing your new property.
With a deposit bond, you can act quickly in the market — even when your funds are temporarily out of reach. Let h2o Loans help you move forward with confidence.
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Drawbacks of Deposit Bonds
- Limited acceptance by sellers: Not all sellers accept bond deposits in place of a traditional cash deposit. When it comes to competitive markets or high-demand properties, sellers could be tempted to prioritise cash deposits over deposit bonds.
- Cost considerations: While deposit bonds are typically cheaper than bridging finance, they still come with an upfront fee. With this in mind, if you're able to arrange a cash deposit in a short period of time, it might not be worth the cost of a deposit bond.
- Short validity period: Deposit bonds are only valid for a specific period of time. If you're buying an off-plan property and the settlement is delayed, you could have to renew your deposit bond and cover any additional costs.
- Additional risk for buyer: Deposit bonds aren't a substitute for your cash deposit once settlement rolls around. So, if the transaction ends up falling through or you have to pull out of the sale, you still have to reimburse the bond issuer. This can result in legal and financial complications.
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At h2o Loans, we believe that buying a home or investing in property should never feel overwhelming. That's why our brokers, loan specialists, and support staff collaborate closely with you — making the process clear, fast, and stress-free. From application to settlement, we're with you every step of the way.
