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What is a deposit bond?

Deposit bonds

What is a deposit bond? A deposit bond is arranged by the property purchaser with an insurance company to provide a guarantee to the vendor that they will receive their 10% deposit even if the purchaser defaults on the contract of sale. A small premium is paid to the insurance company.

All purchase funds are paid at settlement of the property. In the ordinary course of events, settlement takes place, the purchase price is paid in full and the deposit bond simply lapses.

Always Seek Expert Independent Advice

We recommend securing independent advice from an experienced finance broker for all of your property finance decisions. The OZLoans Finance team brings sophisticated advice and advanced financial solutions, backed by 20+ years of experience in finance broking and management accounting. You can also consider it as a cross-check before committing to what may be a complicated, inflexible and unsuitable financial commitment. It is also complimentary.


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