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Do I get my deposit back if finance falls through?
Bayley Clarke · Mortgage broker on the road · Last checked 16 October 2026 · 3 min read
The short answer
It's state by state. In NSW you generally don't have a finance clause. You have a cooling-off period instead, and if your finance isn't approved, you forgo the 0.25% deposit you've paid. On a $500,000 purchase, that's $1,250.
In states that do use a finance clause, like Queensland and Victoria, the contract is conditional on finance being approved by a set date. If it isn't, you're generally eligible to have your initial deposit returned. That's why in NSW, pre-approval matters so much.
The two minute version, filmed from the driver's seat. The rest of this page is the detail underneath it.
How it works in NSW
NSW generally doesn't have a finance clause when you're buying a property. You have what's called a cooling-off period instead. To secure a property once your offer is accepted, you transfer a 0.25% deposit to the real estate agent.
Say it's a $500,000 purchase. 1% is $5,000, so 0.25% is $1,250. You transfer that to the agent, and then you've got your five business days, sometimes longer if the seller agrees to extend it, to get finance approved. If finance isn't approved in that window and you pull out, you forgo the 0.25% you transferred. Cost of doing business. You don't lose the house deposit itself, but that $1,250 is gone.
Why pre-approval matters so much in NSW
Five business days isn't long to get a full approval through. That's why it's important to have pre-approval in place before you start making offers, so you already know where you stand before the clock starts.
If you haven't got pre-approval, go with a lender that has a very speedy turnaround time, and only when you're confident in approval because your broker has pre-qualified you. Pre-qualifying means I've already run your situation against the lender's policy, so the cooling-off period is about confirming the deal, not finding out if you can borrow.
How it works in states with a finance clause
A lot of other states have finance clauses. Honestly, I don't know why NSW is different. It's a little bit annoying. Places like Queensland and Victoria commonly use one. Say in Queensland you have a 14-day finance clause. You get the contract signed, the offer's accepted, and you transfer an initial deposit. But that contract is under the condition that finance is approved within 14 days.
So if finance isn't approved, you're generally eligible to have your initial deposit returned, because you're not proceeding with the purchase. The catch is you need to act within the clause period and follow the contract, so your conveyancer earns their money here.
The honest bit: the clock is the real risk
In NSW the 0.25% is a known, capped cost if you walk during cooling off. It hurts, but it's not the end of the world. The bigger risk is letting the cooling-off period run out without an approval, because after that the stakes are a lot higher than 0.25%.
Wherever you're buying, get your conveyancer to walk you through the contract before you sign, and get your pre-approval sorted before you fall in love with a place.
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The full guide: How to buy your first home What is the 0.25% deposit during the cooling-off period when I'm buying a property in NSW? Exchange versus settlement: what does each one actually mean? When do I pay the deposit to the agent, and where does it go? What is the first step to buy your first home?Not your question? Book a call and ask it, or call 0437 189 939.