Deposit Power

Deposit Power: deposit bonds to buy property without upfront cash

Deposit Power is an Australian entity specialising in the issuance of deposit bonds, a financial instrument that replaces the payment of a cash deposit when purchasing a property. The company has operated nationwide for over 30 years and its bonds carry an "AA-" (Very Strong) credit rating from Standard & Poor's, the same as that of the four major Australian banks. The insurer HDI Global Specialty SE acts as the underwriter of the bonds.

What a deposit bond is and how it works

A deposit bond is a financial guarantee issued as a digital certificate that replaces the cash deposit in a property purchase. It is not a loan or a bank guarantee. To obtain one, the applicant must pass an eligibility assessment demonstrating the financial capacity to settle the purchase. When the bond is provided to the seller, it represents a promise that the deposit amount will be paid at settlement. The buyer can thus secure the property without tying up their cash and pay 100% of the value when the transaction completes. The bond expires once settlement is finalised.

Types of bonds and uses

Deposit Power issues two categories of bonds depending on the term and the type of property:

• Short-term bonds: from 0 to 6 months. They are used to secure already built properties, residential, commercial or investment, and are useful in auctions or private sales.
• Long-term bonds: from 7 to 66 months (5.5 years). They are designed for off-the-plan purchases, properties under construction, house and land packages, and vacant land.

Eligibility requirements

For short-term bonds there are two qualification pathways. The first, called the Fast Track Funds to Complete Assessment, requires demonstrating that the funds to complete the purchase will be available through a loan approval letter, a savings statement or evidence of a financial gift. The second, Home Equity Assessment, requires owning a property with sufficient equity: one times the deposit amount for bonds up to AUD 150,000, or two times that amount for bonds above that figure.

For long-term bonds, the assessment is based on the equity of an existing property: three times the 10% deposit amount for terms of 7 to 24 months, four times for terms of 25 to 36 months and five times for terms of 37 to 66 months.

User profile

The company identifies several groups that benefit from this instrument: first home buyers looking to secure a property without a cash deposit; off-the-plan buyers who want to reserve future units without tying up their savings; investors who free up capital for multiple purchases; retiring couples downsizing without financial stress; divorced couples buying independently without waiting for a cash settlement; families who need to secure their next home before selling their current one; and vendors offering more flexible terms to attract serious buyers.

Application and approval process

The applicant submits the application with the purchase details and their financial situation. Approval occurs almost immediately and the digital bond is delivered to the device within minutes. At the signing of the sale contract, the buyer presents the digital bond to the seller or real estate agent instead of the cash deposit. Full payment of the purchase price, including the deposit amount, is made at settlement.

Backing and market acceptance

Deposit Power bonds are accepted by real estate agents, solicitors, conveyancers and vendors. The company states it has been used by over one million Australians. The integration of Deposit Assure into Deposit Power expands the customer base and maintains support through a customer service team.

Location and contact

Phone: 1800 678 979