The Mask of NAB Deposit Power Guarantee

The key to financial growth is building up your assets such as property, stocks, shares or other investments, but converting these assets into cash can take time. If you need to use the value of your assets towards a home loan deposit, a product such as National Bank's Deposit Power Guarantee could help to speed things along.

NAB's Deposit Power Guarantee is a substitute for a cash deposit that can help you to buy a property faster, as you don't need to break into your investments. For example, if you're planning to buy a new home at an auction, you would need to be prepared with some kind of deposit to offer if you are the successful bidder. So if you are selling your current property but need a deposit for a new property auction, NAB's Deposit Power Guarantee could help you to access the funds faster than other methods of finance, such as bridging loans or overdraft facilities.

The NAB Deposit Power Guarantee allows eligible borrowers to make deposits of up to 10% of the purchase price up to the value of $100,000. Within these limits, Deposit Power Guarantee can be used for all or part of the deposit, but remember that most home loan types still require a deposit of at least 20% to avoid needing to cover the added cost of Lenders Mortgage Insurance.

NAB present Deposit Power Guarantee as their own product, but the fine print reveals that the bank is only acting as an agent for an independent insurance company, Vero Insurance Limited.

Vero Insurance sell their product, Deposit Power, on the basis that they will pay the deposit to the property's seller if you, as the buyer, are not able to pay for the rest of the property's sale. If this happens, Vero Insurance will try to recover the amount of the deposit from you.

Vero Insurance's Deposit Power is also used by other big banks including Commonwealth Bank and Bank West, but each lender packages it up as their own product and receives a commission from Vero Insurance.

Vero Insurance must be satisfied that the borrower is able to pay the completion of the purchase before they will approve a Deposit Power application for NAB customers. To make the most of a product like NAB Deposit Power, you would need to have significant assets and also be able to prove that you can afford to pay up at settlement time.