Deposit Bond Calculator — Australia 2025-26
Evaluating fixed-income investments? Run the numbers.
Calculate the cost of a deposit bond and compare it to a cash deposit, term deposit interest earned, and bridging finance. See exactly which option is cheaper for your property purchase.
Bond costs are estimates. Get quotes from 2–3 providers. Not all vendors accept deposit bonds — always check the contract.
Deposit bonds are useful in specific situations. They are not always the cheapest option — but in the right circumstances, they save significant money.
Your equity is tied up in your existing home. You have found the next property but haven’t settled the current one. A deposit bond lets you exchange contracts now without needing to fund the deposit from savings or a bridging loan. It saves ~$3,000+ vs bridging finance on a typical scenario.
Settlement is 18–24 months away. Instead of having $90,000 sitting in a low-rate account, you use a bond and keep the capital invested in shares, existing property, or a term deposit. The bond cost (1.2% pa) is far below most investment returns (5%+).
Your cash is in a term deposit with a break fee, an investment property you don’t want to sell, or a managed fund. Paying a bond fee is cheaper than liquidating the investment early or paying break costs.
Deposit bonds are not risk-free. Three things buyers often don’t fully understand before signing contracts.
Not all vendors accept deposit bonds. Some contracts explicitly require a cash deposit. Always check the contract of sale before exchanging and before relying on a bond. If you exchange with a bond and the vendor disputes its validity, you may be in breach of contract.
A bond is a guarantee, not insurance for you. If you cannot complete the purchase, the bond provider pays the vendor the deposit. The provider then has full legal recourse against you to recover the amount. You cannot use the bond as a way to walk away from a purchase.
Bond providers assess your financial capacity to complete the purchase. If your income, assets, or existing debt profile doesn’t support the purchase, the application may be declined. Apply early — allow 2–5 business days. Some providers charge an assessment fee regardless of outcome.
If you’re considering a deposit bond, here are the practical steps in the right order.
Before anything else, ask your solicitor to confirm the contract of sale does not contain a cash-only deposit clause. If it does, you need to negotiate with the vendor or arrange cash. This step comes before applying for the bond.
Contact Deposit Assure (depositassure.com.au) and Deposit Power (depositpower.com.au). These are the two main AU deposit bond providers. Quotes are based on your financial profile and the property details. Your mortgage broker can often arrange this and may have access to both.
If you’re using the bond because your existing property hasn’t settled, your solicitor needs to coordinate both settlements carefully. The proceeds from your existing property must arrive before or simultaneously with the new property settlement. Insert appropriate conditions into the contract of sale.
How deposit bond costs are calculated and how the process works
The deposit bond formula
Bond cost = Deposit amount × Annual rate × (Months ÷ 12). Most providers charge 1.0–1.5% per annum of the deposit amount, with a minimum fee of $400–$600 for short periods. The deposit itself is typically 10% of the purchase price, although some contracts require 5% or 20%.
| Example | Bond cost calculation |
|---|---|
| $500k property · 10% · 6 months | $50,000 × 1.2% × 0.5 = $300 → Minimum fee likely applies (~$400–$500) |
| $900k property · 10% · 6 months | $90,000 × 1.2% × 0.5 = $540 → Above minimum; quoted cost applies |
| $1.5M property · 10% · 12 months | $150,000 × 1.2% × 1 = $1,800 → Compare to TD at 5%: $7,500 interest earned |
The three situations where a deposit bond makes financial sense
| Situation | Why bond is better & what to check |
|---|---|
| Selling & buying simultaneously | Equity tied up in existing property; bond avoids bridging loan → Saves ~$2,000–$4,000 vs bridging. Coordinate settlements carefully. |
| Off-the-plan, 12–24 months | Keep capital invested at returns well above 1.2% pa → Even a 5% TD produces 4× the bond cost over 12 months. |
| Cash in illiquid investment | Avoid break fees or liquidating assets at wrong time → Bond fee almost always cheaper than break fee or CGT event. |
When cash deposit is better: you have idle cash in a savings account earning below 3% pa, and the settlement is short (under 3 months). In this case, the bond cost often exceeds the opportunity benefit.
Major Australian deposit bond providers, rates, and maximum terms
| Provider | Details & eligibility |
|---|---|
| Deposit Assure | ~1.2–1.4% pa · Min ~$400 · Up to 48 months → depositassure.com.au · Backed by QBE · Available to any buyer · Apply online |
| Deposit Power | ~1.1–1.3% pa · Min ~$385 · Up to 48 months → depositpower.com.au · Backed by Hollard Insurance · Available to any buyer · Direct and via brokers |
| AGC (Westpac Group) | ~1.1% pa · Min ~$350 · Up to 36 months → Australian Guarantee Corporation · Westpac/AGC customers with approved finance only |
| CommBank guarantee | ~1.0% pa · Min ~$300 · Up to 24 months → Commonwealth Bank home loan customers only · Arrange through your CBA lender |
| St.George guarantee | ~1.1% pa · Min ~$350 · Up to 24 months → St.George (Westpac Group) home loan customers only · Via branch or broker |
Note: Deposit Assure and Deposit Power are available to any buyer regardless of lender. The bank guarantee options (AGC, CommBank, St.George) are generally only available to customers who have finance approved with that bank. Rates and fees are approximate — always get actual quotes. Your mortgage broker can often access multiple providers.
How to get the most from a deposit bond and avoid common mistakes
Before you apply
- Check the contract of sale — confirm there is no cash-only clause before applying for a bond
- Get quotes from both AU providers — Deposit Assure (depositassure.com.au) and Deposit Power (depositpower.com.au). Rates vary; compare total cost.
- Allow application time — 2–5 business days for approval; do not leave it to the day before exchange
- Check the insurer backing the bond — Deposit Assure is backed by QBE Insurance, one of Australia’s largest general insurers
At exchange
Provide the bond document to the vendor’s solicitor at exchange. Ensure it clearly states the property address, deposit amount, and expiry date. The expiry date must be after the expected settlement date — allow a buffer for delays.
Common mistakes
Using a bond on a property where the vendor later claims the bond is invalid (due to a contract clause). Letting the bond expire before settlement. Assuming the bond protects you from completing — it does not; if you cannot settle, the provider pays the vendor and pursues you for repayment.
❓ Frequently askedFrequently asked questions
What is a deposit bond in Australia?
A deposit bond (or deposit guarantee) is a document from an insurer that guarantees the vendor will receive the deposit amount if the buyer fails to complete. It replaces a cash deposit between exchange and settlement. The buyer pays a fee (typically 1–1.5% pa of the deposit amount) and keeps their cash invested elsewhere. If the buyer cannot complete, the insurer pays the vendor and then recovers the money from the buyer.
Is a deposit bond cheaper than a bridging loan?
Almost always yes. A deposit bond at 1.2% pa costs $540 for 6 months on a $90,000 deposit. A bridging loan at 8.5% pa costs $3,825 for the same period — roughly 7 times more. If your cash is tied up in an existing property, a deposit bond is almost always the better option.
Do all vendors accept deposit bonds?
No. Some vendors or their solicitors refuse to accept deposit bonds and require a cash deposit. Always check the contract of sale before relying on a bond. If the contract is silent on the issue, most vendors will accept a bond from a recognised provider. Ask your solicitor to insert a clause confirming bond acceptance if needed.
What happens if I can’t settle using a deposit bond?
The bond provider pays the vendor the deposit amount. The provider then has full legal recourse against you to recover that amount, plus their costs. A deposit bond does not protect you from the financial consequences of not completing a purchase. It is a guarantee for the vendor, not insurance for you.
Can I use a deposit bond for an off-the-plan purchase?
Yes, and this is one of the most common uses. Off-the-plan settlements are typically 12–24 months away, giving you time to keep your capital invested at rates well above the 1.2% bond cost. Most providers offer bonds up to 36–60 months for off-plan purchases. Check that your specific developer and contract of sale accepts bonds — some do not.
How long does it take to get a deposit bond?
Most providers approve and issue a bond within 2–5 business days of receiving a complete application. Some offer same-day or next-day service for straightforward applications. Apply well before exchange — do not leave it to the last minute, as incomplete applications or additional information requests can cause delays.