What is a house Deposit Guarantee? 


If you’re thinking about purchasing a house, property, or land, you probably already know that a cash deposit is required to guarantee the commitment of the buyer. These cash deposits are usually up to 5-10% of the purchase price which aren’t always available on hand to the buyer or the buyer would prefer those funds remain in their possession. This is when home or house Deposit Guarantees come in.


A house Deposit Guarantee can be used as a substitute for a cash deposit as the insurance that the buyer will pay the deposit and full purchase price at the point of settlement. 


What are the benefits of a house Deposit Guarantee?


Now that you know what a deposit guarantee is, you’re probably asking yourself, “Why should I consider using a deposit guarantee? How do I decide between a cash deposit and a deposit guarantee?” 


There are several reasons why a deposit guarantee might be the right route for you instead of a cash deposit:


  • When your equity is tied up in your existing equity

  • When your deposit money is tied up in your investments and your prefer not to cash them out

  • When you need a fast / INSTANT deposit

  • When you want to keep your line of credit free + clear and available for emergencies 

  • When you want convenience, not bank visits and cheque pick up, drop offs and redepositing + waiting for funds to clear


How do house Deposit Guarantees work?


A buyer can apply for a Deposit Guarantee with Home Deposits Now and pay a one-time fee based on the deposit amount and the term required. Once the application is approved, the buyer will receive a certificate of deposit which can be given to the seller. The seller will then hold onto the certificate until the time of settlement and can only claim the Deposit Guarantee if the buyer does not fully pay the deposit by this time. 



Are there risks to using a Deposit Guarantees?


Depending on the real estate agent or vendor, they may not always be familiar with house Deposit Guarantees. It’s best to speak with your real estate agent to avoid any misunderstandings.


House Deposit Guarantees can also be much cheaper than traditional loans, credit cards, or asset liquidation. 

Click here to use our Fee Calculator which can provide you with a cost estimate instantly.


Do you have any questions? We would be happy to help! We’re available via phone, chat, or email!  

We look forward to hearing from you.