How to Secure Your Next Home Without a Cash Deposit

Old-school, sell-first strategy outdated for today’s downsizers.

A move to a smaller home is often driven by lifestyle – better location, more time and less maintenance. The financial side tends to follow a familiar pattern, too. 

First you sell first, and then you buy. That was a solid strategy back in the day when properties were plentiful. Times change, of course. Today, many homeowners want to find their next property BEFORE they sell.

Why? Because discovering the property of your dreams is the hardest part. And you don’t want to have sold your family home, only to give yourself six weeks to find somewhere to live in a market where desirable properties are at a premium. That is a recipe for stress. 

This sequencing problem is one of the more persistent frictions in our property market. It affects the downsizer segment disproportionately: homeowners whose wealth is substantial, but held almost entirely in their existing property.

The Scale of the Equity Position

According to Deloitte’s 2026 Australian Reverse Mortgage Survey, Australians over 60 collectively hold more than $3 trillion in home equity. This is, for most, the largest asset on their balance sheet.

What this figure doesn’t capture is how illiquid that wealth is at the precise moment it matters most. 

To exchange contracts on a new property, a buyer typically needs to commit a 10 per cent deposit in cash. For someone whose capital is sitting in their current home, that requirement has nothing to do with whether they can afford the move. It’s simply a matter of whether they can raise the cash for the deposit.

How This Has Traditionally Been Managed

Three approaches have historically been used to manage this gap, each suited to different circumstances.

Drawing on savings or investments is the simplest where it’s available. For homeowners with a healthy liquid portfolio, funding a deposit this way is uncomplicated. The trade-off is that it can mean realising investments earlier than planned, triggering tax consequences or reducing the buffer set aside for retirement income.

Bridging finance allows a buyer to borrow against their current property to fund the purchase with the loan repaid once that property sells. It’s an established product and, for the right borrower, a workable one. 

It does, however, carry a higher interest rate than standard lending and often means carrying two loans simultaneously. Additionally, lenders are often more conservative when assessing applications from older borrowers even where the underlying equity position is strong.

Reverse mortgages are a different instrument again, designed primarily to provide ongoing income or fund expenses by drawing down equity, with the loan and accrued interest repaid on sale. They serve an important purpose for many retirees, but they aren’t structured as a deposit mechanism for a property purchase.

Equity-Backed Deposit Bonds

A more recent addition to this landscape is the equity-backed deposit bond – a financial instrument that allows existing home equity to be used directly as security for a property deposit. And it’s achieved without that equity being converted to cash and without the homeowner taking on a loan.

Downsizer’s deposit bond operates on this basis. The bond is assessed against the equity held in the applicant’s current home and, once issued, is provided to the vendor of the new property in place of a cash deposit, satisfying the requirement to exchange contracts. 

The applicant’s existing property is unaffected – there is no mortgage placed against it, no early release of superannuation and no obligation to sell on any particular timeframe.

The effect is to separate two decisions that are otherwise forced together: the decision to secure a new property, and the decision about when and how to sell the existing one. 

A buyer can act when the right opportunity presents itself, then manage the sale of their current home with appropriate preparation and timing, which can add tens of thousands of dollars to its value.

Assessing Suitability

Like any financial instrument, a deposit bond of this kind suits some circumstances more than others, and eligibility is worth understanding in some detail.

The principal requirement is that the applicant holds sufficient equity in their current property to support the value of the bond required. From there, the assessment process is largely automated: an automated valuation model establishes the equity position, title checks confirm ownership, and standard identity, anti-money laundering and background screening are completed.

This product is generally most relevant to homeowners who have already decided to sell their current property but need flexibility in the timing. 

A Considered Option for a Specific Problem

For homeowners whose financial position is strong but concentrated in property, the sequencing problem around deposits has historically forced a choice between cost, complexity and compromise. 

An equity-backed deposit bond doesn’t suit every situation, but for those it does suit, it offers a more direct way to align the timing of a purchase with the reality of where their wealth resides without the additional borrowing or disruption that other approaches demand.