Home Loans News
Banks have been collecting millions of Rands every year over the past 15years through a law dating back to the apartheid era. According to a BusinessDay report, the law allowed banks to collect a R5 monthly charge from all home loans.
The charge was imposed on all home loans as a form of compensation to banks for the costs incurred by low-income mortgages.
According to the report the Banking Association has agreed to investigate the R5 monthly charge.
When questioned about the matter, Finance Minister Trevor Manuel replied the he had recently become aware “of the existence of a scheme by which homeowners have been paying R5 per month for the past 15 years to banks for low-cost housing in terms of the Usury Actâ€.
“The matter relates to a charge initiated in term of the Usuary Act 73 of 1968 which, before 1994, was administered by the finance department. Responsibility was subsequently referred to the Trade and Industry department. The National Treasury is in the process of tracking documentation relating to the matter.â€