Deposit Bond Australia has been an authorised issuer of both short and long term deposit bonds since March 1998. Our team has been instrumental in developing the range of deposit bond products now available in the Australian property market, catering to a range of purchasers including first home buyer; investors; self employed; retiree; company trust and SMSF applicants. DBA issues deposit bonds on behalf of the underwriter QBE Insurance (Australia) Limited, the largest Australian global insurer with the highest and only A+ (Stable) S&P rating available in the current market.
As a first home buyer, financing the purchase of your first property can be a daunting and complicated process. A deposit bond can help you enter the property market sooner, without the need to have access to a full cash deposit. This month, the team at DBA share how deposit bonds can help first home buyers achieve the dream of owning their own home:
Deposit Bonds for First Home Buyers
A deposit bond is a financial guarantee, accepted as a legal substitute for the cash deposit required when committing to buy property. Accepted nationwide across all states and territories, deposit bonds are a flexible, safe way for first home buyers to purchase their first property. The value of a deposit bond can be for any amount up to 10% of the agreed purchase price, which the purchaser will then pay 100% of plus acquisition costs at settlement. QBE deposit bonds issued by Deposit Bond Australia are the most time and cost effective way for a first home buyer to secure the deposit to buy a property.
First home buyers can qualify for a deposit bond in two ways: where finance for settlement monies has been formerly approved by a lender based on your genuine savings for guaranteed terms of 6 months or less, or supported by parental guarantee where guarantors must demonstrate adequate equity in current ownership of property. For more information on deposit bonds, including who can apply and how much they cost, see
Benefits of Using a Deposit Bond to Buy Your First Home
There are several benefits to using a deposit bond as a first home buyer. Home deposit bonds are a solution if you do not have all or part of a cash deposit ready. Using trusted deposit bond providers such as QBE and DBA with a collective 40+ years of experience gives vendors assurance that the deposit will be paid in accordance with the Deposit Bond terms. Deposit Bonds are also very cost effective, with an upfront, one-off fee charged when your deposit bond is issued, and no ongoing fees or interest charges. The unsecured nature of deposit bonds means that savings, lines of credit and other assets can be kept intact, while the option of parental guarantors means that you do not need to already own property to be eligible.
Eligibility Requirements for First Home Buyers
First home owner applicants for deposit bonds must be Australian citizens or hold permanent Australian residency status. A first home buyer must also be able to prove their independent ability to service all loan commitments, and that they are able to pay 105% of the purchase price on the contract settlement date. The assessment of your financial position will be made on the date of your application, and is not based on future savings, earnings or asset acquisition. For more information about application forms and supporting documents, download our first home buyer checklist to help guide you through the application process.
Guarantor Commitments for Home Deposit Bonds
If you choose to use a parental guarantee for your deposit bond application, there are also several guarantor commitments required. Parental guarantees are acceptable to support QBE’s minimum equity requirements and to evidence balance of purchase monies including Guarantors’ proof of ownership in Australian property. Your parents must be willing to sign Deed of Guarantee documents and the relevant application form. For more information about guarantor commitments for home deposit bonds, download our guarantor(s) checklist here.
What Sets DBA Apart for First Home Buyer Deposit Bonds
Over our two decades in operation, Deposit Bond Australia has built a reputation as a consistently reliable and efficient issuing agent of home deposit bonds. Our approval process is renowned as one of the most streamlined available, assessing applications, approving applicants and issuing deposit bonds within 1 – 48 hours depending on the complexity of your situation. As a first home buyer, you can be assured that your DBA issued deposit bond is the most cost effective solution, even in a low interest rate market. Using a deposit bond rather than a line of credit ensures that first home buyers are protected against inevitable interest rate rises between the exchange of contracts and settlement. QBE deposit bonds are also accepted nationally by all lenders and major property groups, more efficient than a bank guarantee and with no loan approval required.
The friendly staff at Deposit Bond Australia are available during normal business hours (EST) to talk to first home buyers about their needs. If you have any questions about home deposit bonds, please Contact Us or use our Freecall number 1800 266 388.