Home Loan Lending Policy: ABSA, Nedbank tighten mortgage lending

Nedbank and ABSA Home Loans have further tightened their mortgage lending criteria, effective 1 Dec 2008.

ABSA – SA’s largest home loan provider – has lowered their maximum home loan to 85% of the property value / purchase price. While, Nedbank homeloans are only offering up to 90% bonds.

Although interest rates are expected to drop in the near future, ABSA has stated that they will not ease their loan requirements until property prices begin to increase again.

Luthando Vutula, Managing Executive of ABSA Home Loans has also come out saying that the days of 110% home loans are gone.

110% home loans (no deposit homeloans) were usually issued to first time buyers, to help pay the extra attorney and bond registration costs.

Currently, only 90% home loans are available to South Africans. And in the case vacant land purchases only 75% of the purchase price will be financed by the banks.

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