What is an Exchange Bond^®?

• An Exchange Bond^® is an alternative to paying a cash deposit when buying a new home.
• It is a financial guarantee issued and underwritten by the Exchange Insurance Company Limited which is authorised and regulated by the Financial Services Authority in the UK.
• Simple, secure and easy, an Exchange Bond^® replaces the cash deposit that is normally paid by a buyer to a seller on exchange of contracts to secure a property purchase.
   

How it works

Typically a seller will require a cash deposit of 10% (often more overseas) of the purchase price to secure the property at exchange of contracts.

When the buyer uses an Exchange Bond^®, payment of this deposit is postponed until completion of the property purchase. The Exchange Bond^® guarantees the seller the full deposit amount should the buyer fail to complete the purchase.

At completion, the buyer pays the full purchase price. Should the buyer not complete, The Exchange Insurance Company pays the home builder the deposit amount under the terms of the Exchange Bond^®. The Exchange Insurance Company will then recover the deposit monies from the buyer.

Exchange Bonds can be used by individual or corporate buyers to purchase existing properties, new properties and, depending on location, overseas properties.

Benefits

The benefits of an Exchange Bond^® are numerous. Please see the separate pages detailing the benefits for buyers and home builders.