Deposit Bond is back

Home Bond is back: how deposit bonds help you buy off-plan without parking your cash

Auckland buyers are tired of tying up six figures for two years while a project gets built. Fair enough. The good news is simple: Home Bond-style deposit bonds are back in New Zealand. Used properly, they let you secure an off-plan purchase now and pay the actual cash deposit at settlement, not today.

What is a deposit bond in plain English?

It is a guarantee to the vendor for the deposit amount. You pay a one-off fee, not interest, and the full purchase price, including that deposit, is paid at settlement. No mortgage drawdown and no cash sitting in trust for months.

Why you are hearing about it again

For years, local options were thin. In 2025 two channels re-appeared:

• DepositSmart, referring to Deposit Power, underwritten by HDI Global Specialty SE. They issue short-term bonds for up to six months and long-term bonds for up to 66 months, covering established and off-plan purchases.

• NZMS Deposit Bonds for select projects they fund and approve. They focus on off-the-plans deals they are across, charging a single fee rather than interest.

Translation: buyers again have workable ways to avoid tying up the 10 percent while still getting a contract signed.

When a deposit bond makes sense

• Off-plan with a long sunset. You would rather keep capital working or liquid.

• Bridging a sequence. You are selling one place to buy another, but the timing is messy.

• Investors who want flexibility until titles or CCC, not dead cash in trust the whole time.

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What it costs

You pay a fee based on the bond size and term, not an interest rate. Providers publish minimums and scale by term and risk profile. Get a quote; it is quick.

What lenders, lawyers and developers look for

• Acceptance. Your sale and purchase agreement must allow a deposit bond. Most off-plan contracts do.

• Assessment. You still need to show capacity to settle, such as bank pre-approval, assets, or a sale in train. It is not free money. It is a surety that sits behind you.

• Indemnity. You indemnify the underwriter. If you default and the bond is called, they can seek recovery. Read the terms and have your lawyer review them.

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Pros and cons

Upside

• Keep your cash free for renovations, investing, or a buffer while the build happens.

• One-off fee instead of ongoing interest.

• Long terms available for genuine off-plan timeframes.

Trade-offs

• Not every project or vendor accepts them. Check the contract upfront.

• You must prove settlement ability, just like a cash buyer, only timed later.

• If you do not settle, the underwriter will come knocking. It is a guarantee, not a gift.

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How to use a deposit bond the smart way

1. Confirm acceptance in the S and P. Get the developer’s solicitor to approve the wording.

2. Pick provider. DepositSmart or Deposit Power for broad availability and longer terms. NZMS if you are buying in a project they fund.

3. Line up settlement proof. Bank pre-approval, equity statement, or a signed sale on your existing place.

4. Get the fee quote and issue the bond in the contract deposit clause.

5. Keep your capital productive until settlement, but do not gamble it. You still need to arrive with the funds on the day.

   
   

Bottom line

Home Bond is back in practical terms. Deposit bonds are available again and vendors are used to them. For Auckland off-plan buyers, they are a tidy way to secure the deal without freezing your cash. Use the right provider, nail the contract wording, and keep your settlement plan watertight.