Deposit bond

Deposit Bonds from Australian Mortgage Exchange

Deposit bonds are offered as either short term or long term; from Australian Mortgage Exchange [Aumex®] members. Short term deposit bonds are regarded as between 30 days and 6 months, and long term from 6 months to 48 months, for off the plan property buyers.

"What are deposit bonds?" 

 Deposit bonds are financial derivatives, in the form of a bond or guarantee, that allows a buyer to meet a deposit requirement on the purchase of a property, without actually having the cash available at the time. It is a substitute for cash, in a form that is acceptable to the vendor [seller] or vendor's agent. The actual deposit still has to be paid, but this occurs at settlement when the rest of the purchase price is paid.

To apply for a bond please Click Here and we will get back to you with the costs.

So why haven't most of us heard about deposit bonds before?  

Deposit bonds have been available in Sydney for about 10 years now. In fact around a fifth of all mortgage settlements in Sydney now involve deposit bonds., with the other capitals following this lead. 

Deposit bonds are not generally advertised and the providers use intermediaries such as mortgage brokers to retail the bonds. To apply for a bond contact your nearest Australian Mortgage Exchange Member, or apply here and we will arrange for someone to take your deposit bond application.

The Benefits of using deposit bonds.

1. Deposit Bonds give you the power of cash without having it, [in accessible liquid form] allowing you to take advantage of buying opportunities. [You must have assets to back the bond that are acceptable to the issuer. such as shares, term deposits, real estate property. This product is not for people without realisable assets that will convert to cash.]
2. It generally costs less than other options.
3. It carries no interest penalty. You can have one without making a purchase, until the right property comes along.
4. It offers the convenience of being able to put a deposit down whilst your money is working hard for in term deposits or shares for instance, or even in your existing home when purchasing your next home.

To apply for a deposit bond please Click Here and we will get back to you with the costs.

Where and When are deposit Bonds Used?

1. At Auctions. Auctioneers may want 10% deposit at the fall of the hammer, in either cash or bank cheque. A deposit bond is accepted as cash, and you can fill in the amount and seller and property details, as and when you do the business.
2. Buying your first home. As a first home buyer you'll need to get the cash together to meet the deposit requirements of the lender. However if that cash saved is in a term deposit when your dream home comes up how will you pay the deposit? Making out your credit cards for a big interest bill? Why not get a deposit bond instead? In the meantime your cash is working hard for you earning interest or dividends!
3. Buying your 2nd or 3rd home. Why not buy your next home using deposit bonds instead of using bridging finance, or waiting till the settlement completes on the other home?
4. Buying Investment property. If you own your home and you want to buy an investment property, and want to lend 100% of the investment property price, simply purchase a deposit bond to use as your deposit on the investment home.
5. Buying an apartment off the plan. Where you are buying an apartment off the plan the completion and settlement could be as much as 48 months away, and a deposit bond may be the ideal way to secure this type of investment.

To apply for a deposit bond please Click Here and we will get back to you with the costs.

How much do Deposit bonds cost?

This varies with the price of the property and the length of time the bond is required. The longer the period, the dearer the bond will be. To apply for a deposit bond please Click Here and we will get back to you with a competitive quotation.