Deposit Protect Bond

Deposit Protect Bonds

You have found the right property! Now all that is left for you to do is find the deposit funds to secure that new dream home.

Many home buyers lodge a cash deposit to secure a home, which means they could incur an interest rate penalty for breaking a fixed term investment, or lose valuable interest income.

To ensure you keep earning an income on your deposit monies right up to the day of settlement, there is another way to secure your dream home.

What is a Deposit Protect Bond?

A St.George Deposit Protect Bond acts as a substitute for a cash deposit on a home or investment property purchase. The bond can be written for up to 10% of the contract price and it is then handed to the vendor’s solicitor or agent at exchange of contracts.¹

A St.George Deposit Protect Bond guarantees to the vendor that if you do not pay the deposit on settlement, St.George will pay the deposit.

At settlement, the full purchase price for the property (including the deposit amount) is paid by the purchaser, and the bond obligation is cancelled.

What are the advantages of using a Deposit Protect Bond?

A Deposit Protect Bond is:

Ideal for securing a new home or investment property when utilising equity in an existing property to finance the purchase
Perfect when you don’t have ready access to cash for the deposit
Convenient when attending auctions
Inexpensive and quick – in most cases a bond can be approved within 2 hours
Flexible – a bond can be utilised to secure a variety of properties (i.e. owner occupied, investment, vacant land, commercial properties and company applicants)

Note: Conditions Apply

What documents do I need to provide?

You must provide evidence of funds to complete the purchase transaction. To facilitate the issue of a St.George Deposit Protect Bond as quickly as possible, we may require the documents listed below, as they apply to your circumstances. Additional information may be requested from your real estate agent or solicitor.

A copy of the Contract of Sale of the property you are purchasing
A copy of your St.George Bank loan approval or other bank loan approval
If your purchase is being funded by the sale of another property and that property has been sold, a copy of that Contract of Sale together with your latest loan summary statement for any existing mortgages (if applicable)
If you are a first home purchaser, a copy of your completed Application for First Home Owners Grant or Office of State Revenue approval letter
If you are contributing other funds towards your purchase, evidence of those funds are required (i.e. savings account statement – must be held in an Australian bank account; savings held in the form of shares is not acceptable)
If you are purchasing in a company name, you will need to provide an up to date company search.
You will also need to read, complete and sign a Counter Indemnity and Declaration form as part of the bond application process.

Why use a St.George Deposit Protect Bond?

Conveyancing practice in Australia requires that a deposit be paid when a purchaser exchanges contracts for a property. This deposit is typically sourced from the purchaser’s own savings or additional borrowings. The St.George Deposit Protect Bond removes the need for the purchaser to fund the deposit in this manner.

Who receives the St.George Deposit Protect Bond?

The Deposit Protect Bond is handed to the solicitor or the estate agent to complete the exchange of contracts and can be validated online.

Does the deposit still have to be paid at settlement?

Yes. The bond acts as a substitute for all or part of the deposit enabling the purchaser to enter into a contract more quickly. It does not remove the purchaser’s obligation to pay this money when the contract is settled.

What happens at settlement?

Once settlement has occurred, the bond expires.

If the purchaser defaults under the Contract of Sale and the vendor is entitled to retain the deposit, the vendor can claim the deposit amount guaranteed from St.George Bank Limited. St.George must be provided with the necessary documents detailed on the St.George Deposit Protect Bond Notice to Vendor before it makes a payment under the bond.

St.George will recover from the purchaser the deposit paid by St.George on the purchaser's behalf.

For how long is a St.George Deposit Protect Bond valid?

A St.George Deposit Protect Bond is valid for 26 weeks (6 months) from the date of issue. The Deposit Protect Bond expires when the Contract of Sale is completed, terminated, rescinded or the expiry date occurs, whichever happens first.

St.George Deposit Protect Bonds are issued and guaranteed by St.George Bank – A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL 233714

¹Check with your conveyancer or solicitor about the terms of the contract for sale as the acceptance of the bond is at the discretion of the vendor.

Deposit Protect Bond