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When and how to pay your deposit

The day you finally save enough for your deposit is a big milestone for a first home buyer. But once you’ve got the money together, what do you actually do with it?

While your mortgage lender requires you to put a deposit towards the purchase of your property, you don’t in fact pay the money to them.

Let’s look at two of the more common purchase scenarios to see when, how and to whom you would pay the deposit.

Private sale

If you make an offer on a property and the vendor accepts, a process begins to complete the sale. The first step is the exchange and signing of contracts.  You sign one copy of the contract, the vendor signs the other, then you swap and sign again.

Once the contracts are exchanged and signed, you generally have to pay a 5 – 10% deposit to the vendor’s real estate agent.

The exchange of contracts can take several days. So you have time to arrange a payment method that suits you and the vendor’s real estate agent. Options may include:

  • personal cheque
  • counter cheque
  • electronic funds transfer
  • deposit bond

The agent usually holds the deposit in a trust account until settlement. In some circumstances, the buyer and the vendor could agree to release the deposit funds to the vendor before settlement. You should speak to your solicitor or conveyancer before you agree to such an arrangement.


If you’re the successful bidder at an auction, it’s generally expected that you pay a 5 - 10% deposit on the day of the auction.

Auctions usually happen on the weekend when the banks are closed, so you’ll have to plan how you’re going to pay the money.

You could consider having funds available in an account with a cheque facility. If you have a cheque book you can write a personal cheque on auction day. If you don’t have a cheque book, you could get a counter cheque from a branch prior to the auction. Or you may be able to use a deposit bond.

It’s a good idea to ask the real estate agent before the auction which payment method they will accept.


The cooling-off period

For private sales, in some states there may be a cooling-off period written into the contract. It’s a good idea to have your solicitor check the contract and explain your rights before you sign.

If there is a cooling-off period, you can pull out of the contract during this time. The length of the period varies between states but it’s usually a few days.

Once the cooling-off period has passed, the contract becomes unconditional. Then, you’ve got some time until settlement to finalise your home loan, organise insurance and get ready for moving day.

If you bought at auction, you don’t have the luxury of pulling out of the sale.  There is usually no cooling-off period in auction contracts and you’re legally obliged to complete the sale.

Learn more about what to do in the lead-up to settlement.

To sum up

  • In a private sale, you pay the deposit after you exchange contracts.
  • At an auction, you generally have to pay the deposit on the day.
  • You may be able to pay by personal cheque, counter cheque, EFT or deposit bond.
  • Ask the real estate agent which payment method they prefer.

Calculators to help you plan

Home Loan Deposit Calculator

Estimate how much you’ll have for a deposit once upfront costs are deducted.

Repayments Calculator

Estimate what your home loan repayments could be.

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The information on this page does not take into account your personal needs and financial circumstances and you should consider whether it is appropriate for you and read the relevant terms and conditions, Product Disclosure Statement and the ANZ Financial Services Guide (PDF, 104kB) before acquiring any product. 

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