Home loan
South Africa
Your complete guide to getting a home loan in SA — from eligibility and deposit requirements to the application process, costs, and the First Home Finance subsidy.
✓ Fact-checkedUpdated 18 May 2026Sources: SARB prime rate·NCA affordability guidelines·NHFC First Home Finance eligibility·Ooba / BetterBond Q1 2026 home loan report
Key takeaways
- ✓SA home loans are typically priced at prime ± a risk margin. Prime is currently 10.25%, meaning a prime-rate bond on R1,000,000 over 20 years costs approximately R 9 816 per month.
- ✓Most banks prefer a 10% deposit. A larger deposit typically earns a lower interest rate margin. Some banks offer 100% bonds to qualifying applicants — but at a higher rate.
- ✓First Home Finance (NHFC) offers a government subsidy of up to R 169 264 for qualifying first-time buyers earning up to R22 000/month.
- ✓Transfer duty, attorney fees, and Deeds Office costs add 8–12% to the purchase price for properties above R1.21m. Budget for these on top of your deposit.
In this guide
- 1What is a home loan in South Africa?
How bonds work, variable vs fixed rates, and the prime link
- 2Who qualifies for a home loan?
Income, credit score, deposit, employment — bank requirements explained
- 3What will my repayment be?
Monthly repayment table for R500k–R2m at prime (10.25%)
- 4Step-by-step application process
Pre-approval → offer to purchase → bond application → registration
- 5Total cost of buying a home
Transfer duty, attorneys, Deeds Office, initiation fee — what you actually need in cash
- 6First Home Finance (NHFC subsidy)
Up to R 169 264 cash grant for qualifying first-time buyers
- 7Bond originators vs going direct
Why most buyers use ooba or BetterBond — and when it makes sense
- 8Frequently asked questions
Credit scores, self-employed applications, pre-approval, and more
What is a home loan in South Africa?
A home loan — also called a bond or mortgage — is a secured loan from a bank used to buy residential property. “Secured” means the property itself serves as collateral: if you stop repaying, the bank can approach the courts to repossess and sell the property to recover its money.
In South Africa, most home loans are variable rate, linked to the prime lending rate. Your interest rate is quoted as “prime ± a margin” — e.g. prime + 0.5% or prime − 0.25%. When the SARB cuts or hikes the repo rate, prime moves by the same amount, and so does your monthly repayment.
Fixed-rate home loans exist but come at a premium — typically 1.5–2% above the variable rate — because the bank is absorbing your rate risk for the fixed period (usually 1–5 years). Most SA borrowers remain on variable rates.
Current prime rate
10.25%
Variable-rate bond benchmark
Standard bond term
20 years
240 monthly repayments
Typical deposit
10%
Of the purchase price
Who qualifies for a home loan?
SA banks assess applications against the National Credit Act (NCA) affordability rules and their own credit criteria. The main factors:
Income and affordability
Your gross monthly income drives how much you can borrow. Banks apply the 30% rule: your bond repayment should not exceed 30% of gross income. Some banks also apply a 36% total-debt cap (all monthly debt obligations including bond, car, credit card, personal loan). You must demonstrate income via 3 months' payslips and bank statements.
Credit score and history
Banks check your credit record at TransUnion, Experian, and Compuscan. A score above 700 opens competitive rates; below 600 typically means rejection without a co-applicant or large deposit. Clear any defaults, judgements, or overdue accounts before applying — these are red flags regardless of income.
Deposit
A 10% deposit reduces the bank's loan-to-value (LTV) to 90% and is the typical starting point for competitive rates. A 20% deposit can qualify you for below-prime rates. 100% bonds (no deposit) are offered to qualifying applicants but require an excellent credit score and come at a higher rate.
Employment status
Salaried permanent employees are easiest to assess — consistent payslips and employer confirmation. Contract employees and self-employed applicants require more documentation (SARS tax returns, 3 years of financials) and face more scrutiny. A minimum 2-year employment/business history is typical.
Age
Banks want the loan repaid before or at retirement — typically by age 65 or 70. A 45-year-old applicant may only qualify for a 20-year bond at some banks; others may offer up to 25 years. An older applicant may need a larger deposit to reduce the loan amount.
What will my repayment be?
Monthly bond repayment at prime (10.25%) over 20 years, at 10% deposit
| Purchase price | Loan amount | Monthly repayment |
|---|---|---|
| R 550 000 | R 500 000 | R 4 908 |
| R 833 000 | R 750 000 | R 7 362 |
| R 1 111 000 | R 1 000 000 | R 9 816 |
| R 1 667 000 | R 1 500 000 | R 14 725 |
| R 2 222 000 | R 2 000 000 | R 19 633 |
Calculate your exact repayment
Enter your purchase price, deposit, rate, and term — see your monthly repayment and full cost of credit.
Repayments are interest-only in the early years — a 20-year bond has paid off less than 20% of principal after 5 years at current rates. Check the full amortisation schedule in the calculator.
Step-by-step application process
Get pre-approved
1–3 business daysApply to a bank or bond originator for a pre-approval certificate. The bank assesses your income, credit, and affordability without a specific property. You receive a maximum loan amount — use this to set your property search budget.
Find a property and sign an offer to purchase (OTP)
Days to weeksOnce you've found a property and agreed on price, sign the Offer to Purchase. The OTP is a legally binding contract — have it reviewed by an attorney if you're unsure. The OTP includes a suspensive condition: the deal lapses if bond approval is not granted within a specified period (typically 30 days).
Submit your full bond application
ImmediateYour bank or bond originator submits the full application with the OTP, property valuation, and supporting documents. The bank orders an independent valuation of the property (you typically pay a valuation fee of R1,500–R3,500).
Receive bond approval
5–10 business daysThe bank approves the bond (subject to conditions), issues a formal offer of grant specifying the loan amount, rate, and term. Review the rate offered carefully — you can negotiate, especially if you've received competing offers from other banks.
Attorneys prepare for transfer
4–8 weeksThe seller's attorney and your bond attorney prepare all transfer and bond documents. You pay the upfront costs (transfer duty, attorney fees, Deeds Office fees). SARS issues a transfer duty receipt after payment.
Registration at the Deeds Office
1–2 days after lodgementThe Deeds Office registers the transfer of ownership and the bond simultaneously. You are now the registered owner. Bond repayments typically begin one month after registration.
Total cost of buying a home
On top of your deposit, you need cash for once-off upfront costs. These cannot be rolled into the bond at most banks and must be paid before registration.
| Cost item | Who it goes to | Who pays |
|---|---|---|
| Transfer duty | SARS | Buyer |
| Transfer attorney fee | Conveyancer | Buyer |
| Deeds Office (transfer) | Deeds Office | Buyer |
| Bond registration attorney fee | Bond attorney | Buyer |
| Deeds Office (bond) | Deeds Office | Buyer |
| Bank initiation fee | Bank | Buyer |
| Property valuation fee | Bank (outsourced) | Buyer |
| Building insurance | Insurer | Buyer |
| Estate agent commission | Agent | Seller |
On a R1,500,000 purchase with a R1,350,000 bond, expect to pay approximately R70,000–R90,000 in once-off costs on top of your R150,000 deposit. Use the transfer cost calculator for an exact itemised breakdown.
First Home Finance — NHFC subsidy
First Home Finance (formerly FLISP) is a government grant administered by the National Housing Finance Corporation (NHFC). It is available to qualifying first-time home buyers and can be used to reduce the bond amount, cover upfront costs, or as a deposit.
Maximum subsidy
R 169 264
For income below R3,501/month
Income ceiling
R22 000/mo
Gross monthly income
Minimum income
R3,501/mo
Cannot earn below this
The subsidy is on a sliding scale — higher income means a smaller grant. Other eligibility conditions: you must be a South African citizen or permanent resident; the property must be your primary residence; you must not have received a government housing subsidy before; and you must have an approved home loan.
Calculate your First Home Finance subsidy →Bond originators vs going direct to a bank
A bond originator submits your application to multiple banks simultaneously and negotiates on your behalf. The two largest in SA are ooba (ooba.co.za) and BetterBond (betterbond.co.za). They do not charge the buyer — they earn a fee from the approving bank.
Why use a bond originator
- → Multiple bank offers in one application
- → Banks compete — typically results in a better rate
- → Free for the buyer
- → Dedicated consultant handles paperwork
- → Originators know which banks approve which profiles
Why go direct to your bank
- → Existing relationship may yield a loyalty discount
- → Simpler if you only want one bank's product
- → Some banks (SA Home Loans) don't work via originators
- → May be faster if you're an existing home loan customer
Compare SA home loan providers
FNB Bond Calculator
Largest bank by retail customers. Online application with same-day pre-approval in many cases.
Standard Bank Bond Calculator
Strong processing times. MyMortgage app tracks your application in real time.
Absa Bond Calculator
Competitive rates for salaried professionals. Absa HomeBuy® pre-approval certificate.
Nedbank Bond Calculator
Digital application. Good rates for existing Nedbank clients.
Capitec Bond Calculator
Newer entrant, simple fee structure, suitable for first-time buyers.
SA Home Loans Bond Calculator
Specialist mortgage lender — competitive rates, no branch network required.
Frequently asked questions
What is the minimum income to qualify for a home loan in South Africa?
There is no official minimum income threshold — banks assess affordability individually. The standard rule of thumb is that your monthly bond repayment should not exceed 30% of your gross monthly income. On a R1,000,000 bond at 10.25% over 20 years, the repayment is approximately R9,800 per month, implying a minimum gross income of around R32,700. In practice, banks also weigh your credit record, existing debt, and employment stability.
What credit score do I need for a home loan in South Africa?
SA banks use their own internal scoring models, but broadly: a score above 650 (out of 999 on major bureaux) is considered acceptable, above 700 is good, and above 750 significantly improves your chances of a competitive rate offer. A score below 600 makes approval unlikely without a co-applicant or substantial deposit. Check your credit score free at TransUnion, Experian, or ClearScore before applying.
How much deposit do I need for a home loan?
Most banks prefer a 10% deposit — it reduces the bank's exposure and often qualifies you for a better interest rate. A 20% deposit can get you prime or below-prime rates. Some banks offer 100% home loans (no deposit) to qualifying applicants with excellent credit scores and stable employment, but these come at a higher interest rate and require payment of transfer costs from your own funds. Transfer duty on a R1.5m property is R 8 700, plus attorney fees.
What is the difference between a bank and a bond originator?
A bank offers its own home loan product. A bond originator (like ooba or BetterBond) submits your application to multiple banks simultaneously and presents you with the best offer. Bond originators do not charge the buyer — they earn a commission from the approving bank. Using an originator typically results in a better rate than going directly to one bank, because the banks compete for your business.
How long does the home loan application process take?
Pre-approval (in-principle approval based on income and credit) typically takes 1–3 business days. Full approval — after the bank has assessed the specific property — takes 5–10 business days. Registration at the Deeds Office typically takes 4–8 weeks after all conditions are met, attorneys are instructed, and SARS transfer duty is paid. The full process from offer to purchase to ownership is usually 6–12 weeks.
What is a home loan pre-approval and should I get one?
A pre-approval is a conditional indication from a bank of how much they would lend you, based on your income, credit, and debt. It is not a guarantee — it must be confirmed once you identify a specific property. Getting pre-approved before you start house-hunting is strongly recommended: it defines your realistic price range, speeds up the formal application once you find a property, and signals to sellers that you are a serious buyer.
Can I get a home loan if I am self-employed?
Yes. Self-employed applicants are assessed differently from salaried employees. Banks typically require: 3 years of audited or independently reviewed financial statements, a minimum 2-year trading history in the same industry, and proof of consistent income (bank statements + tax returns). Self-employed applicants often face higher interest rates and may need a larger deposit. Using a bond originator who is experienced with self-employed clients can significantly improve your outcome.
What does 'prime plus' mean on a home loan?
'Prime plus' means your interest rate is linked to the prime lending rate and will move up or down whenever the SARB changes rates. Prime is currently 10.25%. A loan at 'prime + 1%' means you are paying 11.25%. A loan at 'prime − 0.25%' means you pay 10.00%. Most SA home loans are variable rate — your monthly repayment changes whenever the MPC moves the repo rate.
Related calculators
Bond Calculator
Monthly repayment at any rate, term, and loan amount
Bond Affordability
How much can you borrow based on your income and debt?
Transfer Cost Calculator
Upfront buying costs: duty + attorneys + Deeds Office
Transfer Duty Calculator
Exact SARS duty on any purchase price
First Home Finance
NHFC subsidy up to R 169 264 for qualifying buyers
Prime Rate South Africa
Current rate, history, and what rate changes mean for your bond
Interest Rate Forecast
What economists expect for SA rates in 2026 and beyond
Property Hub
All SA property calculators in one place
Was this page helpful?
Data: Effective May 2026 · SARB prime rate · NCA Regulation 23A affordability rules · NHFC First Home Finance eligibility criteria · Ooba Home Loans Q1 2026 property report · See methodology