A deposit bond is a financial guarantee issued by DepositSure Limited that stands in place of the cash deposit required when property purchase contracts become unconditional. It is not a loan and is not a form of credit. At settlement, you pay the full purchase price to the vendor in cash — including what would have been the deposit amount — and the bond is cancelled.

DepositSure Limited long-term deposit bonds are designed for purchases where settlement is more than 6 months away.

Common uses include:

• Off-the-plan apartments and townhouses with settlements tied to construction completion (typically 12–36 months away)

• Vacant land purchases subject to the issue of title with sunset dates

• New builds under construction with a sunset date in the sale and purchase agreement

Using a deposit bond allows you to keep your cash earning returns in savings or investments right up to settlement day.

No. A deposit bond is not a loan and is not a form of credit or private credit. No money is advanced or paid to you or to the vendor when the contract becomes unconditional — only a bond certificate is issued. You remain fully responsible for paying 100% of the purchase price at settlement, which includes the deposit amount.

Applications must be submitted through a registered New Zealand mortgage broker or property adviser who will complete the DepositSure Limited Bond Application Form and submit it with supporting documents.

Contact us at:  bonds@depositsure.co.nz

For straightforward applications with clear equity and complete documentation, DepositSure Limited typically issues a decision the same business day. More complex applications (trusts, multiple applicants, properties requiring independent valuation) may take 2–3 business days.

Approval is primarily based on equity in your existing New Zealand property and a clean credit record. We do not assess income or conduct a debt-to-income assessment. If you meet the equity requirement below and have no significant credit issues, approval is very likely.

• Bonds up to 6 months: net equity in Secured Property must be at least 2× the bond amount

• Bonds 7 – 24 months: net equity in Secured Property must be at least 3× the bond amount

• Bonds 25 – 36 months: net equity must be at least 4× the bond amount

• Bonds 37 – 48 months: net equity must be at least 5× the bond amount

Net equity = current market value minus all outstanding mortgages and registered charges.

DepositSure Limited charges a flat fee of 3.5% of the bond amount for each year, or part of a year, of the bond term plus an administration fee of $495. There are no interest charges, no hidden fees, and no pro-rata reduction for partial years — each year or part year is charged at the full 3.5% rate.

Yes — the bond amount can be for any amount up to 10% of the purchase price. You may also split the deposit, paying part in cash and obtaining a bond for the remainder (subject to the vendor's requirements). For example, if a NZ$1,000,000 purchase requires a 10% deposit (NZ$100,000), you could pay NZ$20,000 cash and obtain an NZ$80,000 bond.

The Counter Indemnity is your written acknowledgement that you remain personally responsible for the deposit amount DepositSure Limited is guaranteeing on your behalf. In plain English: if you default and the vendor calls on the bond, DepositSure Limited pays the vendor and then recovers that amount from you. The Counter Indemnity is the legal document that confirms this obligation and gives DepositSure Limited the right to take recovery action, including via the caveat registered on your property.

Under the Counter Indemnity, you agree to grant DepositSure Limited a mortgage over the Secured Property. DepositSure Limited registers a caveat against the Secured Property under the Land Transfer Act 2017 to protect that interest before the bond certificate is released. The caveat:

• Prevents you from selling, transferring or further mortgaging the Secured Property without DepositSure Limited's knowledge and consent

• Is removed once the bond has expired without a claim, or once any claim amount has been repaid by you to DepositSure Limited in full

• Does not prevent you from living in or using your property in the normal way

As long as you settle your purchase as required, the caveat will be withdrawn.

A guarantor is required where:

• Co-owners of the Secured Property are not directly applying for the bond — they must guarantee the application because they are legal owners of the property used as security

• A company or trust is applying — all directors and trustees must complete the Guarantee and Indemnity personally

• When a first home buyer has insufficient equity in their own name, a family member with qualifying equity may stand as guarantor

Guarantors must own New Zealand residential property meeting the applicable equity requirement. The form must be signed before an independent witness.

There is no automatic refund if you change your mind once the bond is issued.

• Cash deposit substituted for the bond — provide the bond certificate and a letter from the vendor's solicitor confirming a cash deposit is held, and the bond may be surrendered.

If a bond is surrendered in these circumstances, a partial rebate of the bond fee may be available. The rebate is calculated from the date of the request to the bond expiry date, in whole year increments. No further administration fee is charged, although the original $495 administration fee is non-refundable. Because fees are charged in full-year increments, rebates are also calculated in full-year increments where applicable.

If you default under the purchase contract and the vendor makes a valid claim on the bond, DepositSure Limited will pay the vendor the bond amount and then seek full recovery from you under the Counter Indemnity, including by enforcement of its agreement to mortgage over the Secured Property (which is secured by the caveat) if necessary.

Warning: Carefully assess your ability to settle before going unconditional on contracts to buy. If your financial circumstances change during the bond term, consult your mortgage broker immediately to discuss your options. DepositSure Limited is not a lender and cannot assist with settlement funding.

Acceptance is at the developer's / vendor's discretion and may also require approval from the developer's lender. Always confirm acceptance with the developer or vendor's agent before submitting your application for a bond. DepositSure Limited bonds are designed to meet New Zealand market standards, but acceptance by the developer/vendor is up to them, not DepositSure Limited.