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home loan deposit


How and when to pay your home loan deposit

Whether you’re looking into home loans or ready to pay your deposit, here’s how to seal the deal when it comes to buying at auction or private sale.

Buying a home is one of the biggest purchases you might make. Before you pay the deposit, here’s what to know.

First things first

Before paying your deposit, it’s a good idea to call in the experts. Ask your conveyancer or solicitor to read the paperwork so there’s no hidden surprises. Once you’re good to go, you’ll pay the first part of the deposit into the real estate agents’ trust account, where it’s kept until settlement.

How to pay your home loan deposit

There’s a few ways to pay your deposit. The most common are:

  1. Electronic funds transfer (EFT) – If you’re paying by EFT, make sure to up your daily transfer limit so you can easily cover the deposit amount.

  2. Deposit bonds – These need a bit of prep before auction day. They’re a separate loan via a third-party insurer that gives you an upfront payment for your deposit. They might be useful if you can’t access your cash in time but want to secure the sale.

  3. Cheque deposit – If you’re a fan of the cheque, you could write one at auction (or for a private sale). But if you don’t have a cheque book, you’ll need to visit a bank branch.

When to pay the deposit at auction

At auction, the deposit gets paid when you exchange contracts. Ask the agent beforehand about which payment types they’ll accept (EFT, deposit bonds or cheque), as the day itself can be pretty full on and you’ll want to be prepared.

Once you’re at the auction, make sure you register to bid. When things kick off, there’ll probably be a bit of back and forth as you hammer it out with other bidders. If you make the winning offer and the auctioneer accepts, the other bidders will exit the building while the agent gets the contracts ready.

This is when you’ll pay the deposit (usually 10%) via the agreed payment method. Anything extra will be paid on settlement day, which is usually around four-six weeks (but could be up to four months!) later.

But what happens if you bid at auction and can’t pay? You’d obviously want to avoid this at all costs because even if you can’t pay the deposit, you might have to cover the seller’s marketing, real estate and auctioneer fees. There’s also a chance you’ll still have to buy the home and take out extra loans to cover your costs.

When to pay the deposit at a private sale

It might not be as fast-paced as buying under the hammer, but you could still be up against other buyers. Make sure you have your financial ducks in a row if the owner accepts your bid.

Once you’ve inspected the house and it feels like home, it’s time to make an offer. With a private sale, you deal directly with the agent or seller so you might have more control over how much you end up paying.

If the seller accepts your offer, the contracts come out - one for you and one for the vendor. Once they’re signed and swapped, it’s time to hand over the cash and pay your deposit.

Cooling-off period

If you buy in a private sale, you might have a cooling-off period. It’s usually around five days and gives you the option to withdraw if you change your mind. It also lets you get your finances in order and sneak in those last-minute inspections. Just an FYI, if you do pull out you could lose part of your deposit.

Paying the deposit for your new home is a big deal. Now that you’re across the nitty-gritty, the whole process will hopefully be a lot easier. If you’re in the market for a new home but still on the hunt for a loan, check out our low interest rates to get the ball rolling.


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The information contained in this article is of a general nature only. It doesn’t take account of any person’s objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate for your circumstances and seek independent legal, financial, and taxation advice.