Buying a home is one of the biggest financial decisions you will make in South Africa. Before you start house hunting, it is essential to know how much you can afford.
The 30% Rule
Most South African banks recommend that your monthly home loan repayment should not exceed 30% of your gross monthly income. This ensures you have enough income left for other expenses.
Deposit Requirements
While 100% bonds are sometimes available, most banks require a deposit of at least 10% of the purchase price. A larger deposit means a lower bond amount and less interest paid over the loan term.
Additional Costs
When buying property in South Africa, budget for these additional costs:
- Transfer duty (payable to SARS)
- Bond registration fees
- Conveyancing attorney fees
- Initiation fee (bank)
Use our Home Loan Affordability Calculator and Deposit Calculator to plan your property purchase.