How do exchange bonds work when paying a house deposit? The developer has given me information on where to obtain an exchange bond to allow me use this as a deposit against a new house while I am waiting for my existing one to be sold. They maintain that this is a good method of paying the deposit without using up cash which I require in the short term. There seems to be an application fee of £85 and a premium to be paid upon acceptance but I cant find out anything about what this premium might be without applying and handing over the non-refundable £85. Any ideas on what a typical premium might be? How do the bonds work? The selling agent maintains they are cheaper than a bridging loan, is this true?