Home Loan FAQ

The current SA prime lending rate is 10.25%, effective 20 November 2025. The SARB repo rate is 6.75%. Prime is always calculated as repo + 3.50%. See our Current Prime Rate page for the full history and MPC meeting dates.

The repo rate (repurchase rate) is the interest rate at which the South African Reserve Bank (SARB) lends money to commercial banks. The prime rate is the benchmark lending rate that SA banks use for home loans and other credit — it is always prime = repo + 3.50%. When the SARB cuts the repo rate by 0.25%, your home loan rate drops by the same 0.25% the following month.

Yes, but fixed rates in South Africa are unusual and are only available for short terms (typically 1–2 years). Most SA home loans are variable rate, meaning they track the prime rate and change whenever the SARB adjusts the repo rate. Some banks offer a "capped rate" product. A fixed rate gives certainty but you usually pay a premium, and you cannot benefit from rate cuts during the fixed period.

This depends on your credit score, deposit size, income stability, and which bank you apply to. Good credit and a 20%+ deposit could get you prime minus 0.5% to prime minus 1% (currently 9.75%–9.25%). Poor credit or no deposit may result in prime plus 1%–2% (currently 11.25%–12.25%). Using a bond originator (ooba, BetterBond) is the most effective way to secure the best rate — they apply to multiple banks simultaneously and negotiate on your behalf, all for free.

Standard requirements for SA banks: South African ID (or valid passport for foreign nationals); 3 months' payslips (salaried employees) or 2 years' financial statements (self-employed); 3 months' bank statements; signed offer to purchase; details of other debt (car, credit cards, personal loans); proof of address (utility bill, not older than 3 months). Self-employed applicants typically need 2 years of audited financials and a letter from their accountant.

Yes — always use a bond originator. Bond originators like ooba and BetterBond apply to multiple SA banks simultaneously on your behalf, compare the offers, and negotiate the best rate. Their service is 100% free to you — they are paid by the bank that approves your bond. Research consistently shows that bond originators secure approval rates and interest rates that are better than applying to a single bank directly.

Conditional approval typically takes 3–7 business days once you submit a complete application. Final approval (formal grant) takes a further 3–5 days. If you use a bond originator, they manage the process and follow up with each bank. From formal grant to registration at the Deeds Office typically takes 6–10 weeks.

SA banks use TransUnion and Experian credit scores. A score above 650 is generally needed for approval; above 700 gets you better rates; above 750 opens the door to prime minus rates. Check your score for free via ClearScore SA or the credit bureaus before applying. If your score is below 650, focus on clearing defaults, reducing credit card balances, and paying every account on time for 6–12 months before applying.

SA banks assess affordability using two main tests: (1) Debt-to-income (DTI) ratio — your total monthly debt repayments (including the proposed bond) should not exceed 30–33% of your gross monthly income. (2) Net income affordability — after tax, living expenses, and all debt repayments, you must have enough remaining income to service the bond. The more conservative result determines your maximum qualifying amount. Use our Affordability Calculator to model both.

Yes, but SA banks typically count only 50–75% of rental income, to allow for vacancy periods and maintenance. You will need a signed lease agreement and proof of rental payments. For properties you plan to buy-to-let, some banks will factor in the expected rental income, but you will generally still need to qualify on your primary income.

Yes — the three fastest improvements are: (1) Pay off short-term debt — settling a R500/month car payment increases your qualifying bond by roughly R50,000–R70,000. (2) Increase your deposit — a larger deposit reduces both your loan amount and interest rate. (3) Apply with a co-applicant (spouse or partner) — banks combine both incomes for affordability. Avoid taking on any new debt in the 6 months before applying.

Beyond the deposit, budget for: Transfer duty (0–13% depending on price — see table); transfer attorney fees (R5,000–R35,000+ depending on price); bond registration attorney fees (similar to transfer attorney); deeds office levy (R100–R1,500); FICA and admin fees (~R1,500); and optionally a home inspection fee (R2,000–R4,000). Total transfer costs typically run 3–6% of the purchase price. Use our Transfer Duty Calculator for a full breakdown.

No. When buying a newly built property directly from a VAT-registered developer, VAT (15%) replaces transfer duty. You cannot be charged both. VAT is typically included in the developer's advertised price — always confirm this. You still pay attorney and deeds office fees on new builds. If a developer is not VAT-registered (very unusual), transfer duty would apply.

Transfer duty is a tax calculated strictly on the purchase price — there is no legal way to reduce it for a given property. However, you can minimise it by: buying below the R1,100,000 threshold (zero duty); buying a new development where VAT applies instead; or structuring a purchase to include moveable assets (like appliances or furniture) separately, which reduces the "property" portion of the price. The last strategy is legal but must be reflected accurately in the sale agreement and must represent genuine moveable items.

Yes, and no penalty. South African variable-rate home loans allow unlimited additional payments with no early repayment penalty. Every extra rand goes directly to reducing your principal, which reduces the interest charged the following month. Even R1,000 extra per month on a R1.5M bond over 20 years saves over R350,000 in interest and cuts 4 years off your bond. Use our Extra Payments Calculator to model your scenario.

An access bond (or flexi bond) lets you re-draw any extra payments you have made into the bond, similar to a revolving credit facility. Banks like FNB (FlexiReserve), Standard Bank, and Nedbank offer access bonds. The benefit is that extra payments reduce your interest immediately, but you can access the money if needed. The risk is that you may be tempted to draw down the funds instead of keeping them invested in the bond.

On a variable rate bond, your monthly payment changes automatically. When prime drops 0.25%, your payment drops proportionally. You have the option to keep paying your original instalment — any extra now goes to reducing your principal and paying off your bond faster. This is the recommended approach when rates fall. Banks typically notify you of the new repayment amount within a few days of the SARB announcement.

An amortization schedule shows exactly how each monthly payment is split between interest and principal for every month of your bond. In the early years, most of your payment goes to interest. As the principal reduces, more goes to principal each month. Our Bond Repayment Calculator generates a full annual and monthly amortization schedule you can print.

South Africa offers several benefits: (1) FLISP subsidy — the Finance Linked Individual Subsidy Programme provides government subsidies of R27,960–R121,626 for first-time buyers earning R3,501–R22,000/month. (2) Zero transfer duty on properties below R1,100,000 (applies to all buyers, not just first-timers). (3) 100% bond products from some banks for qualifying first-time buyers. (4) Lower interest rate on first home loans with some banks as a promotional incentive.

FLISP (Finance Linked Individual Subsidy Programme) is a once-off housing subsidy from the government. To qualify, you must: be a South African citizen or permanent resident; be a first-time home buyer; earn between R3,501 and R22,000 per month (gross); be buying a property worth R1,000,000 or less; have an approved home loan. The subsidy is paid directly to reduce your bond — you don't receive cash. Apply through your bank or a bond originator when you apply for your home loan.

This depends on your life stage, financial situation, and where you live. In most SA cities, buying is financially better than renting over a 7+ year period, because: SA rental escalation averages 8–10% per year (your bond payment is fixed); you build equity; and property appreciation averages 5–8% annually. However, buying costs (transfer duty, attorney fees) mean renting can be cheaper in the short term (under 5 years). Use our Bond vs Rent Calculator to model your specific situation.