Question 1

What is bond registration?

Accepted Answer

When a buyer finances through a home loan, the bank registers a bond over the property at the Deeds Office. This happens simultaneously with transfer. Bond registration costs are paid by the buyer.

Question 2

What is bond cancellation when selling?

Accepted Answer

The seller's existing home loan must be cancelled during transfer. A cancellation attorney obtains figures from the bank, settles the bond from sale proceeds and lodges cancellation documents. Costs are typically borne by the seller.

Question 3

Should I use a bond originator?

Accepted Answer

Bond originators submit your application to multiple banks to find competitive rates and improve approval chances. Their service is typically free to the buyer as they earn commission from the bank.

Question 4

How do banks calculate bond affordability?

Accepted Answer

Banks assess gross and net income, existing debt commitments, credit record, employment stability, property valuation and deposit amount. Monthly bond repayments should generally stay within safe affordability limits.

Question 5

Is my deposit safe if the sale falls through?

Accepted Answer

If held in the conveyancer's trust account or as agreed in the OTP, the deposit should be refunded if suspensive conditions fail. If the buyer breaches an unconditional contract, the seller may be entitled to the deposit.

Question 6

Should I choose a fixed or variable interest rate?

Accepted Answer

Fixed rates offer payment certainty but are usually higher initially. Variable rates move with the prime rate — lower now but can increase. Consider your risk tolerance, budget margin and how long you plan to stay in the property.

Question 7

Can I pay extra into my home loan?

Accepted Answer

Yes — most banks allow additional payments that reduce capital and save interest over time. Confirm whether your bank allows access to paid-ahead funds and whether early settlement penalties apply on fixed-rate bonds.

Bond & Finance Questions