A word from Deposit Power
Deposit Power takes a specialised approach to helping Australians secure their next property, providing a fast, flexible alternative to traditional cash deposits.
Our purpose is to give home buyers the confidence to act quickly in a competitive market, without needing to tie up large sums of cash for the deposit.
We work with buyers and brokers to simplify the process: to free up funds, enable faster property purchases, and provide peace of mind through a reliable, cost-effective solution.
Our approach aims to give borrowers the best of both worlds – the ability to secure the property they want while keeping their cash available, supported by Deposit Power bonds underwritten by HDI, which holds a “AA-” (Very Strong) credit rating from S&P Global Ratings, putting it on par with Australia’s major banks.
Every stage of the property journey brings its challenges, but the first hurdle for nearly anyone – whether they’re buying, downsizing, or investing – is getting enough cash together for the deposit.
The trouble is, clearing this hurdle is now harder than ever.
For buyers, it often comes down to a question of time: can they afford to wait and save a full deposit while property prices keep climbing in a competitive market?
The average first home buyer now needs approximately 5.9 years to save the value of a 20 per cent deposit on a median-priced home, according to the PropTrack CommBank First Home Buyer Report 2025, released in September.
But over that time, property prices are likely to grow rapidly – outpacing the ability to save enough. In the space of six years, the national mean residential dwelling price has shot up roughly 56.6 per cent – from $649,300 in June 2019 to $1,016,700 in June 2025 – according to the Australian Bureau of Statistics (ABS).
That means borrowers would have needed to save $129,860 for a 20 per cent deposit in 2019, but that would have risen by more than $73,000 (to $203,340) by 2025.
Even for a modest 10 per cent deposit, borrowers now need to provide a far greater cash sum – rising from $64,930 in 2019 to $101,670 in 2025, an increase of more than $36,740.
The challenge is just as acute for other borrower profiles.
For instance, downsizers or upsizers may be asset-rich on paper, but with their wealth tied up in property, they’re often in limbo, until a sale settles.
Investors, meanwhile, risk missing opportunities while waiting to liquidate assets or complete a refinance.
Nick Rumpff, head of sales and distribution at deposit bonds provider Deposit Power, says a competitive market makes the ability to move quickly more important than ever.
“The deposit on a new property is usually a significant sum of cash. For a number of reasons, this cash might not be available to the buyer immediately and therefore they need to consider another option such as a deposit bond,” he says.
“If a buyer needs to wait in order to have the full deposit amount in cash, they may miss out on their perfect property.”
On your marks
Borrowers already have several ways to clear the deposit hurdle, including guarantor loans, bridging finance, and lenders mortgage insurance (LMI), and the government’s expanded First Home Guarantee scheme.
But each come with their own advantages and drawbacks.
Guarantor loans let a family member use their property as security. However, this places responsibility on the guarantor and carries risks if repayments are missed.
Bridging finance covers the gap between buying a new property and selling an existing one. While it allows buyers to act quickly, it can come with higher interest rates and fees, and borrowers must manage two loans simultaneously.
LMI protects lenders when deposits are below 20 per cent, enabling buyers to access finance sooner, but it adds extra costs to the loan.
Meanwhile, the demand for the government’s First Home Guarantee Scheme places is anticipated to be huge, once the placement and income limits are removed on 1 October, meaning turnarounds could blow out for these spots.
Deposit bonds offer another alternative. Acting as a substitute for a cash deposit, they allow borrowers to move quickly and confidently without scrambling to provide a large upfront sum.
Buyers pay a one-off fee to the deposit bond issuer, with the value of the deposit settled at the time of property settlement.
Zac Wotherspoon, mortgage broker at Sydney-based brokerage Core Mortgage Brokers, says deposit bonds have proven a popular choice with his clients.
“A lot of times, you meet people who are looking at property and they may not have that 5 per cent deposit available,” he says.
“They might be waiting on some sales proceeds. They might be waiting to transfer funds from one account to another. They might be selling crypto or selling shares to come up with a 5 per cent deposit. Deposit bonds eliminate all of that, and it’s a very smooth process.”
Different lanes
First home buyers, downsizers, and investors aren’t the only ones turning to deposit bonds.
Rumpff says deposit bonds can be particularly effective for buyers purchasing off the plan, allowing them to hold onto their cash, while the property is being built.
“For example, buyers could earn 5.5 to 6 per cent per annum in interest by keeping their funds in an offset account, while the bond fee is only 3 per cent per annum,” he says.
“Often, the buyer’s cash is safer in their hands than in the developer’s account, and if the developer faces financial hardship, the funds aren’t at risk or tied up.”
Property transitions during separation or divorce are another use case.
“You can purchase new properties quickly without the need for large upfront deposits, making it easier to manage shared assets,” Rumpff adds.
They can even prove effective in the commercial property space.
“Business is all about cash flow,” he says.
“So you can now buy a commercial property and keep your cash liquid.”
For Wotherspoon, the strength of the mechanism is that it enables property buyers the chance to be able to seize the right opportunity at the right time.
“We see a lot of people when they’re selling and buying at the same time and maybe the real estate agent is holding onto a deposit and won’t release it. Cases like that,” he says.
“Really, the main ones are when people don’t have the upfront cash. They know they’ll have the cash post settlement. A lot of people might have the cash, but they might need it for an emergency fund. Or they might not want to use it because it’s in a certain account.”
Past the post
So, should we expect to see a greater uptake of deposit bonds in coming years?
Wotherspoon believes so and says: “I think these deposit bonds are going to go crazy.
“We’ll see a lot of people using these bonds and saving their cash … you’re going to see a massive influx of these being issued.”
Rumpff also says brokers should think about the way they frame these bonds with clients, seeing them as an opportunity to act quickly rather than a last resort.
“A deposit bond is a great tool for many different property buyers. It can be a proactive tool to allow potential buyers to buy a property earlier than they otherwise could,” he says.
“It takes 10 minutes to apply and is approved within hours.”
Wotherspoon says the borrowers he works with have generally been receptive to the product.
“The reaction is normally very good. A lot of people will ask if there’s a fee and there is a fee – on a $450,000 purchase, a 10 per cent deposit, for example, you’re looking at about $600 to $700. A lot of people are happy to pay. They really see it as a win,” he says.
Rumpff also urges brokers to see the opportunity to use deposit bonds in helping borrowers overcome the deposit hurdle and step confidently into the property market.
“The property market has never been more competitive and the most successful brokers are increasingly using all tools available to them to help their clients succeed in the property market,” he says.
“Deposit bonds are essential for their tool kit to provide their clients with the ‘edge’ when searching for their next property.”
Case study: Real savings for off-the-plan buyers
Purchase price = $1,200,000
10 per cent deposit = $120,000
Sunset date = four years
Deposit bond fees = $14,000
By using a bond instead of cash, buyers can keep their $120,000 in:
An offset account at 5.5 per cent per annum for four years and save $12,000 or A high-interest earning account at 4.5 per cent per annum for four years and save $9,218
*Individual tax implications not taken into consideration.
