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Deposit bond calculator

Is a deposit bond cheaper than funding the deposit in cash until settlement? Put in your quote and see.

Example figure — replace it with your quote. The fee in your quote from the bond issuer is the only reliable figure: no issuer publishes a rate card.

The last field is what the deposit would cost you the other way — your redraw or loan rate if you would borrow it, or the return you would give up if you would cash something in.

Your quote

Cash is cheaper by

$382

Funding the deposit in cash is cheaper here: $518 of interest over 42 days against a $900 fee.

Against funding it in cash

Deposit the bond covers$75,000
Bond fee$900
Interest on the cash for 42 days$518
Difference$382

1.2% of a $75,000 deposit — the rate your quote works out at.

Bond fee against the cost of the cash

A comparison of two ways to cover the deposit over the same period: the one-off bond fee you were quoted, and the interest on borrowing the same deposit for the days between exchange and settlement.

Next: the rest of the cash you need on the day → Upfront costs of buying a house

Deposit bond fees are quotes, not a published schedule, so the fee here is your own input and no average is asserted. Term and cap figures are Deposit Power’s published limits and other issuers may differ. General information only — not financial or legal advice.

No issuer publishes a rate card for deposit bonds, so we will not print a national average and pretend it is a schedule. Put the fee you were actually quoted in, and the tool answers the question the quote cannot: is the bond cheaper than funding the deposit in cash for the same number of days?

It protects the seller, not you

This is the part worth reading twice, because the word “bond” makes it sound like cover you have bought for yourself. It is not. The bond is a guarantee given to the vendor, underwritten by an insurer — Deposit Power’s are written by HDI Global Specialty SE, rated AA− by Standard & Poor’s.

If you fail to complete, the vendor claims, the underwriter pays them, and then the underwriter recovers the money from you. Your liability does not shrink by a dollar. Everything the bond does happens to the timing of the cash, which is exactly why the calculator above prices it against the other way of solving a timing problem.

The vendor has to agree, and that is negotiated

A deposit bond is not something you can simply present at exchange. In the standard Law Society of NSW contract the deposit-bond clause only operates if the contract records that the vendor agreed to accept one; without that, the ordinary cash-deposit terms apply and a bond satisfies nothing.

Because the agreement has to be recorded in the contract, it has to be settled before exchange. Ask early, because discovering the answer on signing day is how a bond fee gets wasted.

Short term, long term, and the 10% ceiling

Deposit Power publishes a short-term bond of up to six months for established property and a long-term bond of up to 66 months for something off the plan or still being built, with the bond capped at 10% of the purchase price. Those limits are the published ones for that issuer; other providers set their own, so check before assuming.

The calculator flags both boundaries rather than quietly capping your numbers. A settlement past six months is outside the short-term bond as published, so the quote you need is for the long-term product. Counted in calendar months, six months runs from 181 to 184 days depending on the dates — so when your day count lands in that range, the calculator asks you to check the date.

Frequently asked questions

How much does a deposit bond cost?
Nobody publishes a rate card, which is why this page asks for your quote rather than printing an average. Deposit Power runs a public fee calculator and its own page says the figure is indicative only and confirmed when you apply. Any site quoting you a firm national percentage is estimating. Get the actual quote, put it in above, and the tool restates it as a percentage so you can hold two quotes side by side.
Does the seller have to accept a deposit bond?
No, it is not automatic. Under the Law Society of NSW contract for the sale and purchase of land, the deposit-bond clause only operates where the contract records that the vendor agreed to take one — otherwise the ordinary cash-deposit terms stand. The agreement has to be in the contract you exchange, so raise it early rather than turning up on the day with a bond nobody has approved.
Is a deposit bond a way to buy without a deposit?
No. It moves when the money is due, not whether it is owed. You still have to produce the full deposit on the agreed date, and at settlement you pay the whole purchase price as normal. What the bond buys is time — useful when your cash is tied up in an investment or in a sale that has not settled yet.
What happens if my purchase falls through?
The vendor claims on the bond, the underwriter pays them, and then it comes after you. Deposit Power puts it plainly: it "will then seek to recover the deposit amount from the purchaser". You are no better off than if you had paid cash and forfeited it — the bond protected the seller, not you. Treat it as a timing product, never as cover for a purchase you are unsure about.
How long can a deposit bond last?
Deposit Power publishes two products: short term for up to six months on an established property, and long term for up to 66 months on something off the plan or under construction. The bond amount is capped at 10% of the purchase price. Read as calendar months, six months can be anything from 181 to 184 days, so the calculator flags a settlement that is certainly past the short-term limit and asks you to check the date when the day count sits on the line.
Can I get the fee back if I do not use the bond?
Partly, and only if you move fast. Deposit Power refunds a bond that was never handed to the vendor if you cancel within 30 days of it being issued, less an administration fee of $290 on a short-term bond or $700 on a long-term one. Once the bond has been provided to the vendor it has done its job and the fee is gone, whether or not the purchase completes.

Keep tallying

Buying before selling

Bridging loan calculator

The other way to buy before your cash arrives — peak debt, bridge interest and the end debt you keep.

Open calculator →

The whole bill

Upfront costs of buying

Deposit aside, the cash you need on the day: duty, registry fees, LMI, legals and inspections.

Open calculator →

Sources

  • Definition of a deposit bond — ASIC Moneysmart glossary.
  • Vendor agreement, and the clause that depends on it — Law Society of NSW, Contract for the sale and purchase of land, 2022 edition.
  • Terms, the 10% cap, the underwriter, claim recovery and cancellation fees — Deposit Power FAQs. These are one issuer’s published limits, not an industry standard.
  • No issuer publishes a fee rate card. Deposit Power’s own fee calculator states the figure it returns is indicative and confirmed on application, which is why this page computes on your quote instead of asserting a market rate.