There are several types of home loans available from the major banks in South Africa.  Below we have listed a few of the different options, but for more details and advise, speak to one of our Home Loan Originators.

First time buyers Home Loan

If you have never owned a property or had a home loan before, a special home loan is available, whereby the banks will lend you more than 100% of the property value.  This will allow you to include the transfer and registration costs into the home loan, making it easier for you to enter the property market.  No deposit is required with this option.

A Variable Home Loan

This is just a normal home loan which is given at the negotiated interest rate.  Home Loan rates are always negotiable, and are generally affected by the amount of the loan taken out.  The smaller the loan, the less chance you have of getting below the prime lending rate.  With this type of home loan, if the interest rates increase by 1 percent, your home loan rate will increase accordingly.  If the interest rate drops, so will your home loan rate.

Fixed Home Loan Rate

With this type of home loan, your interest rate is fixed for a period of time.  Usually for one or two years.  One thing to bear in mind is this option, is that the interest rate will be slightly higher than the current home loan rate.  One good advantage is that it protects you from rising interest rates, so for that period of time you know what your bond repayments are.  The only downside is that if the interest rates drop, your home loan rate will stay unchanged – thus costing you more at the end of the day.

Capped Home Loan Rate

With this type of Home Loan, your interest rate is capped at a maximum rate of interest for a period of time, so you will never pay more than the capped rate.  If the interest rates increase, you will never pay more than the capped rate you have negotiated.  A good thing about this option is that you will enjoy the  benefits if the rates decrease.  Please note – this type of Home Loan is not always available, and certain criteria is required before the Banks will approve your application.

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