Home Loans

Home Loan News: The gradual return of 100% home loans continues.

image by thomas_sly

FNB made two important announcements. The first and most positive is that home loan deposit requirements have been lowered from 10% to only 5%. These 95% bonds are available to properties under R1.5million, and are based on both the risk profile of the applicants and the property.

FNB is now the first of the major banks to offer 95% bonds on ordinary property purchases. Full 100% Bonds are currently available from various other banks, but are only applicable in very specific situations – such as when purchasing Repossessed Properties.

This move by FNB should be a welcome relief to many would-be buyers, who were struggling to secure property finance due to the high deposit requirements.

Maximum Loan Terms of 20 Years

While the bank has decided to offer higher mortgages, it has also announced that it will only consider loan terms up to 20 years. Previously, FNB offered home loan terms of up to 30years.

The decision to shorten the maximum loan terms is an interesting one. Shorter loan terms mean higher monthly instalments but it also means you’ll pay less on interest charges. Shortening the loan term would also help FNB manage the risk of approving bigger loan amounts.

A Boost for the Local Property Market

Estate Agents around the country have been calling on the banks to lower their lending criteria to give the property market a boost. This will certainly be a welcome move by FNB, and the other banks may shortly follow suit.

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