What is a 10/90?

23 November 2021

If you’ve ever noticed our Porter Davis Townhomes that encourage our customers to pay a 10% deposit and nothing else until completion, you may have some questions about a 10/90 contract and the benefits of a 10/90 contract when building your new dream home.

What Is A 10/90 Contract?

With a 10/90 contract, you simply pay your 10% deposit and nothing more until you move in, which means no interest or mortgage repayments throughout the build! What does that mean for you? That means you pay your 10% deposit and can continue to save for the remainder of your build period! There are no interest and mortgage repayments until you move in and just one contract, so there is no need to sign a separate land and build contract.

A 10/90 townhouse is constructed with a party wall system, meaning there is an additional 150mm of floor space resulting in approximately 5 square meters of additional living area on a traditional 4-bed townhome. This allows Porter Davis to achieve a premium design outcome to the front façade without compromising any luxury. Porter Davis Townhome facades are Hamptons or Contemporary, and customers choose between two interior colour schemes depending on the house facade.

What Is An Off Plan Contract?

An off a plan contract, or more commonly referred to as a 10/90 contract, is where a customer signs a contract with the Developer and only pay a 10% deposit for the total package price. Once the land title registers, the purchase will not have to settle on the land or pay progress payments throughout the construction of their home. Upon completion of the home before moving in, the purchaser will pay the 90% balance to the Developer.

Benefits Of A 10/90 Contract

When committing to a 10/90 townhome, your builder has more control over when they commence construction of the townhomes. In this case, Porter Davis is responsible for the construction and build timelines and are not reliant on customers achieving finance approval on the land beforehand. In contrast, a Split Contract must commence when customers have completed their finance approval.

What Is A Split Contract?

Comparable townhomes in the market are often reoffered to as house & land packages or split contract townhomes; however, this will require you to settle on the land and pay progress payments on your build before you move in, unlike a 10/90 contract which allows you to pay just the 10% deposit. 

A split contract can be best defined as a traditional house and land sale where the purchaser signs a land contract with a Developer and a separate build contract with the Builder. In this scenario, the purchaser will pay a 5% or 10% deposit for the build contract. Once the land title registers, the purchaser will settle on the land with the Developer and pay staged progress payments to the builder throughout the construction of their home. 

When choosing which contract suits you best, it’s best to chat to a Porter Davis Sales Consultant who will be able to provide you with further information around our Townhomes, including any questions around inclusions, pricing and other important questions.