1. Who can apply for a Deposit Bond?

2. Why do Purchasers like Deposit Bonds?

3. Is a Deposit Bond Cheaper than other Deposit Options?

4. Can I use Deposit Bonds at auctions?

5. Will the vendor accept my Deposit Bond?

6. Does the Contract of Sale need amending for the acceptance of a Deposit Bond?

7. What is the Counter Indemnity?

8. What happens if I default under the contract of sale

9. When does the Deposit Bond expire?

10. Can I obtain a refund after the Deposit Bond has been issued?

1. Who can apply for a Deposit Bond?

Eligible applicants include individuals and companies. The applicant may be an existing property owner who wishes to purchase another property, investors who wish to expand their property portfolio or first home purchasers with an unconditional loan approval.

2. Why do purchasers like Deposit Bonds?

For many of today's property purchasers, the cash required for the 10% deposit is often tied up in their current home or other investments. This can mean either expensive bridging finance or borrowing from a finance company at high interest rates. Regardless of where the finance is obtained, interest charges, establishment fees and other up-front costs connected with the loan can be expensive and time-consuming to arrange. Deposit Access offers an efficient, secure alternative that can save you time and money.

3. Is a Deposit Bond Cheaper than other Deposit Options?

Generally, yes. A 12-month Deposit Bond representing a $40,000 deposit would cost a once only fee of $1,355.

On the other hand, if you had to obtain finance, you would need to consider the cost of all fees and interest charges. For example, Short-term finance for $40,000 could cost you:
• An application fee (often 1.5% of the amount to be borrowed) = $600
• Interest payable (assuming interest rate of 8%) = $3,200
The total cost of finance in the above example is $3,800.

Even if you use an already available Line of Credit, and have no upfront fees, the interest costs for a year at the Standard Home Loan variable rate of 7.32% would see you paying over $2,900 in interest which is, more than double the cost of a Deposit Bond.

In the above examples, a Deposit Access Deposit bond is far less expensive and is usually approved and issued within 24-48 hours of us receiving your application, thus enabling you a quick exchange process.

4. Can I use the Deposit Bonds at auctions?

Yes. A Deposit Bond approval can be issued prior to you attending an auction. The amount can be fixed, but not the property details, so you can attend a number of auctions. You simply advise us of the final purchase price, the vendor and property details when you are the successful bidder. Deposit Access will then supply the vendor with a completed Deposit Bond within 24 business hours of purchase.

5. Will the vendor accept my Deposit Bond?

The Deposit Bond is a legal document and is available in all states of Australia and in New Zealand. It is at the sole discretion of the vendor to accept a Deposit Bond.

Our Deposit Bonds are guaranteed by QBE Insurance. Given the credibility and credit worthiness of QBE, the vast majority of vendors will accept our Deposit Bonds. As QBE are Australia’s largest international general insurance and reinsurance group, with a credit rating of A+, most vendors have Deposit Access as a preferred supplier.

6. Does the Contract of Sale need amending for the acceptance of a Deposit Bond?

Sometimes. In New South Wales, the Standard Contract for Sale of Land carries a clause recognising Deposit Bonds as a legitimate deposit transaction. In other States it depends on the contract. Your solicitor will be able to advise you if the wording in the contract allows Deposit Bonds to be accepted.

7. What is the Counter Indemnity Agreement?

Our Deposit Bonds are issued on the understanding that you will pay the vendor the Deposit Bond amount on the settlement date of the contract. The Counter Indemnity Agreement is part of the application form. It is a legally binding right you give to QBE Insurance to pursue recovery against you for any part of the Deposit Bond amount that must be paid to the vendor if you default under the Contract of Sale.

8. What happens if I default under the Contract of Sale?

If you default under the contract of sale, the vendor is entitled to retain the Deposit Bond amount. The vendor can claim the amount from QBE Insurance. This amount will be paid to the vendor nominated in the contract after QBE Insurance is provided with the necessary documents. QBE Insurance will then seek recovery from you via the Counter Indemnity Agreement.

9. When does the Deposit Bond expire?

The Deposit Bond ceases when the Contract of Sale is completed, terminated, rescinded or the expiry date occurs, whichever happens first. The Deposit Bond also terminates when a claim is paid by QBE Insurance, the guarantor.

10. Can I obtain a refund after the Deposit Bond has been issued?

Yes, provided you return the unused, original Deposit Bond Certificate to us within 30 days of issue, the fee will be partially refunded. An administration fee will be deducted and the balance will be refunded to you.