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Following the latest RBA rate rise on Tuesday 29th September, Deposit Power CEO, Ryan Dinsdale, looks beyond borrowing capacity to another consideration for property buyers: how they manage their deposit and financial flexibility between exchange and settlement.
Beyond the impact on borrowing capacity, rate rises make home deposits more expensive in a way most people don’t think about.
For those wanting to purchase in the coming months, or facing long settlement times to buy off-the-plan, consider whether tens of thousands of dollars should sit idle, awaiting settlement, or if it could be working harder for you in a mortgage offset or high-interest savings account.
Making your deposit work harder through to settlement
As Aussies pay closer attention to every dollar, it’s important to think about not just how they save for a deposit, but how they manage that capital right up until settlement.
Many people remain unaware of alternatives to a cash deposit that give buyers more flexibility – and for those buying a new build, a longer term financial benefit.
“It’s important to think about not just how you save for a deposit, but how you manage that capital right up until settlement.”
While every buyer’s situation is different, in a higher-rate environment it’s worth considering whether handing over a traditional cash deposit at the outset is the best use of capital.
For buyers waiting to sell an existing property, purchasing off-the-plan, or managing other financial commitments, maintaining flexibility can be incredibly valuable.
That’s where alternatives such as deposit bonds can play an important role.
Consider what your deposit could be doing differently
A deposit bond can provide an alternative to paying the cash deposit upfront, allowing eligible buyers to secure a property while keeping their funds available until settlement.
If you’re weighing up how to manage your deposit, learn more about how deposit bonds work, or use Deposit Power’s Savings Calculator to explore the potential difference between paying a cash deposit upfront and keeping those funds working elsewhere until settlement.
Every buyer’s circumstances are different, so it’s worth understanding your options before deciding what works for you.
