How to secure a 100% Home Loan

100% No Deposit Home Loans

South African Banks are constantly changing their lending policies.
100% Home Loans have returned & are available, but the banks are understandably more cautious when approving these bonds.
Read: How to secure 100% and 110% Bonds

Home Loan Tips: Which banks are offering are currently offering full 100% bonds?

The four major mortgage providers in South Africa are:

Although the property market may go through its ups and downs, one of the few things that does remain relatively constant is the demand for 100% home loans.
The banks are always changing, re-evaluating and assessing their lending policies to ensure they’re keeping pace with the current market conditions.

For this reason, you should always speak to your bond originator before you decide to sign an Offer-To-Purchase on a new property.
Your bond consultant will been able to tell you what the banks are currently willing to offer you.

Currently the requirements for a 100% bond are:

A Willing Lender:
Before you can hope to secure a 100% bond you’ll need to find out which of the banks are currently offering mortgage up to 100% of the value of the property.

A Clean and Clear Credit Record:
Your credit rating and credit record are among the most important factors to consider whenever you are applying for credit.
The banks use these ratings to gauge how well you conduct your accounts. The higher your rating, the more likely you are to be approved for the full loan amount.
The interest rate on your bond is also determined, in part, by your credit rating.

Property Value and Types of properties:
Bargain Deals
In some situations, you may find that the value of the property far exceeds the price you’ve paid.
In these situations the banks are often very keen to grant you a full 100% bond, as their risk is covered by the extra value. If anything goes wrong the bank knows that you will be able to settle the bond by selling the property.

Repossessed Properties
Currently, the banks each have loads of repossessed properties on their books. In an effort to sell these properties they have launched a campaign to grant full 100% bonds on these sales.

Your Own Affordability:
And finally, the bank will not grant you a full 100% mortgage if you are not able to afford the monthly bond repayments.

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14 Comments For This Post

Nikhel Says:
November 23rd, 2009 at 12:04 pm

Hi, thank you very much for this piece of information, I am very glad go through this and this has been very useful to me. Thank you very much.

Uzzy Says:
November 24th, 2009 at 9:13 am

I just want to know, WHERE DO THE BANKS THINK FIRST TIME BUYERS WITH AN AVERAGE INCOME, MUST GET AN ODD R120 000 TO PAY A DEPOSIT, TRANSFER FEES ETC. ETC?? In other words average earning individuals will never be able to buy property?

Db Says:
November 30th, 2009 at 1:21 pm

Uzzy – agreed – where must I come up with R75,000 to cover deposits and transfer fees and, and, and…

This website, however, does have some great property info – it has helped me very much so far!

David Says:
December 2nd, 2009 at 9:41 pm

Uzzy: “I just want to know, WHERE DO THE BANKS THINK FIRST TIME BUYERS WITH AN AVERAGE INCOME, MUST GET AN ODD R120 000 TO PAY A DEPOSIT, TRANSFER FEES ETC. ETC??”

Uzzy, you are right, the ‘average people’ are screwed. However don’t blame the banks, blame the government with their stupid National Credit Act.

Ashley Says:
December 8th, 2009 at 12:10 pm

I think this article is very misleading because many of the banks are still applying a threshold of 90% although they are advertising 100% facilities, covering themselves by the “up to” portion.

I know of at least one bank which is advertising “up to” 100% loans but its valuations are capped at 90% and its LTV valuations are not based on market value but on mortgage value. So in fact, a person with an impeccible personal portfolio might get a very good rate but if the bank thinks that in the case of a repo sale it may only be able to recover 85% of the market value that would be the LTV it would offer.

brian Says:
January 8th, 2010 at 3:26 pm

I just went through the excruciating process of approaching FNB (of which I am a premium banker), finding out what I could afford and given a figure that I could offer when looking for a house. Found a house, went to get the loan… REJECTED!!! Thanks for nothing FNB!

Euginia Says:
February 5th, 2010 at 12:32 pm

Is standard bank not offering home loans now?

Gino S Says:
February 10th, 2010 at 8:21 am

@Euginia

Standard Bank are certainly still offering homeloans.
At present they will even consider offering you a 100% bond.
The banks are constantly reviewing their lending criteria, and adjusting them to match the current market conditions.

Feel free to contact us directly if you would like more information about this.
email: olen@propertyloans.co.za
ph: 0861 111563

John Davies Says:
March 1st, 2010 at 10:53 pm

I need 100% mortagage in SA for buy to let residential or commercial property.

I’m not South African & I live in UK. My salary is > £50k per year.
Just wondering if this is feasible.

Willing to get advice via email re banks that offer such facilities and how I can go about it. Cheers

Gino S Says:
March 2nd, 2010 at 5:09 pm

Hi John, 100% mortgages are only currently available to South African citizens. Although, this ruling could change in the future.

I would suggest subscribing to our email newsletter if you’d like to receive a notice if/when this 100% bonds become available to foreign buyers.

Mimi Says:
May 5th, 2010 at 1:43 pm

Hi, I want to find out a person that earns a gross amount of R20526.50pm and a nett of R13372.48 pm, under normal circumstances, approximately how much bond would they qualify for? I know the Credit act applies and all the other expenses/credit are taken into consideration.

I’ll appreciate your assistance.

Paling Says:
May 20th, 2010 at 2:46 pm

Hi Mimi,

You will be allowed to commit up to 30% of your gross income to debt repayments.
If you are buying with someone else, that person’s gross income can be added to yours.
You also need to take into acount existing debt and those installments.
Your approximate max loan amount (under 14% interest rate conditions for safety’s sake) is then given by:

{(GrossIncome x 0.3) – ExistingDebtInstallments} x 80

E.g. if you’re buying on your own, and you’re paying R1200 per month on other debt, then

{(20526.50 x 0.3) – 1200} x 80
= { 6157.95 – 1200} x 80
= 4957.95 x 80
= R396,636.00 max allowable debt

This should give you a rough idea, work with +/- R50,000.00 on this. You can also Google for calculators.

Whether or not you’ll receive a bond for this much also depends heavily on the property value, how much you offered, and anticipated market movement (see my previous comment).

Mark Says:
May 25th, 2010 at 3:05 pm

I am currently having the same issue, does not matter how much your maximun allowable debt is, you will only receive 85 – 90% bond of the property amoun in the offer to purchase, therefore although you qualify for a R1m bond, you are not going to get R850 000.

I find this extremely difficult to understand if you have the best credit rating at your bank with a number of investments and products and when you require them the most, they leave you in the dark.

yuan prins Says:
August 21st, 2010 at 6:51 am

want to buy my parents house with a 2nd home on with an rental of R3000 per month for the next 5 years and at the moment I am paying R5000 rent for an mine house

house price R1050000 and the value is +- 1200000

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Nikhel Says:
November 23rd, 2009 at 12:04 pm
Hi, thank you very much for this piece of information, I am very glad go through this and this has been very useful to me. Thank you very much.
Uzzy Says:
November 24th, 2009 at 9:13 am
I just want to know, WHERE DO THE BANKS THINK FIRST TIME BUYERS WITH AN AVERAGE INCOME, MUST GET AN ODD R120 000 TO PAY A DEPOSIT, TRANSFER FEES ETC. ETC?? In other words average earning individuals will never be able to buy property?
Db Says:
November 30th, 2009 at 1:21 pm
Uzzy – agreed – where must I come up with R75,000 to cover deposits and transfer fees and, and, and…

This website, however, does have some great property info – it has helped me very much so far!
David Says:
December 2nd, 2009 at 9:41 pm
Uzzy: “I just want to know, WHERE DO THE BANKS THINK FIRST TIME BUYERS WITH AN AVERAGE INCOME, MUST GET AN ODD R120 000 TO PAY A DEPOSIT, TRANSFER FEES ETC. ETC??”

Uzzy, you are right, the ‘average people’ are screwed. However don’t blame the banks, blame the government with their stupid National Credit Act.
Ashley Says:
December 8th, 2009 at 12:10 pm
I think this article is very misleading because many of the banks are still applying a threshold of 90% although they are advertising 100% facilities, covering themselves by the “up to” portion.

I know of at least one bank which is advertising “up to” 100% loans but its valuations are capped at 90% and its LTV valuations are not based on market value but on mortgage value. So in fact, a person with an impeccible personal portfolio might get a very good rate but if the bank thinks that in the case of a repo sale it may only be able to recover 85% of the market value that would be the LTV it would offer.
brian Says:
January 8th, 2010 at 3:26 pm
I just went through the excruciating process of approaching FNB (of which I am a premium banker), finding out what I could afford and given a figure that I could offer when looking for a house. Found a house, went to get the loan… REJECTED!!! Thanks for nothing FNB!
Euginia Says:
February 5th, 2010 at 12:32 pm
Is standard bank not offering home loans now?
Gino S Says:
February 10th, 2010 at 8:21 am
@Euginia

Standard Bank are certainly still offering homeloans.
At present they will even consider offering you a 100% bond.
The banks are constantly reviewing their lending criteria, and adjusting them to match the current market conditions.

Feel free to contact us directly if you would like more information about this.
email: olen@propertyloans.co.za
ph: 0861 111563
John Davies Says:
March 1st, 2010 at 10:53 pm
I need 100% mortagage in SA for buy to let residential or commercial property.

I’m not South African & I live in UK. My salary is > £50k per year.
Just wondering if this is feasible.

Willing to get advice via email re banks that offer such facilities and how I can go about it. Cheers
Gino S Says:
March 2nd, 2010 at 5:09 pm
Hi John, 100% mortgages are only currently available to South African citizens. Although, this ruling could change in the future.

I would suggest subscribing to our email newsletter if you’d like to receive a notice if/when this 100% bonds become available to foreign buyers.
Mimi Says:
May 5th, 2010 at 1:43 pm
Hi, I want to find out a person that earns a gross amount of R20526.50pm and a nett of R13372.48 pm, under normal circumstances, approximately how much bond would they qualify for? I know the Credit act applies and all the other expenses/credit are taken into consideration.

I’ll appreciate your assistance.
Paling Says:
May 20th, 2010 at 2:46 pm
Hi Mimi,

You will be allowed to commit up to 30% of your gross income to debt repayments.
If you are buying with someone else, that person’s gross income can be added to yours.
You also need to take into acount existing debt and those installments.
Your approximate max loan amount (under 14% interest rate conditions for safety’s sake) is then given by:

{(GrossIncome x 0.3) – ExistingDebtInstallments} x 80

E.g. if you’re buying on your own, and you’re paying R1200 per month on other debt, then

{(20526.50 x 0.3) – 1200} x 80
= { 6157.95 – 1200} x 80
= 4957.95 x 80
= R396,636.00 max allowable debt

This should give you a rough idea, work with +/- R50,000.00 on this. You can also Google for calculators.

Whether or not you’ll receive a bond for this much also depends heavily on the property value, how much you offered, and anticipated market movement (see my previous comment).
Mark Says:
May 25th, 2010 at 3:05 pm
Hi

I am currently having the same issue, does not matter how much your maximun allowable debt is, you will only receive 85 – 90% bond of the property amoun in the offer to purchase, therefore although you qualify for a R1m bond, you are not going to get R850 000.

I find this extremely difficult to understand if you have the best credit rating at your bank with a number of investments and products and when you require them the most, they leave you in the dark.
yuan prins Says:
August 21st, 2010 at 6:51 am
want to buy my parents house with a 2nd home on with an rental of R3000 per month for the next 5 years and at the moment I am paying R5000 rent for an mine house

house price R1050000 and the value is +- 1200000

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