An easy to understand guide to Home Loan products designed for first-time buyers from FNB, ABSA, Nedbank and Standard Bank.
Most of people dream of owning their own properties but when it comes to finding finance for that first house they’re often overwhelmed by jargon and confused by the various options.
Shopping around for a home loan can be a tedious task especially if you’re unsure of whether you’ll be able to qualify for a mortgage.
Lets compare Absa, FNB, Nedbank and Standard Home Loans…
Here is an easy to understand guide to the types of SA homeloans available to first-time home buyers:
Nedbank Home Loans: ALPHABOND
Nedbank’s Alfabond is designed to cater for the unique financial needs of first-time home buyers. It enables you to structure your finances more effectively by assisting you with those costly start-up costs or by helping you to improve your cash flow.
AlfaBond is tailored towards the needs of first-time buyers by assisting them with the costly start-up costs or by granting a 3-month payment holiday. This means that there is extra money to purchase those necessary household goods for your new home.
There are two product options:
Costs capitalised: You can register a Home Loan of up to 108% to cover your start-up costs. The additional 8% will cover the tariff fee, registration costs and transfer duty as well as a guaranteed cash-back, which varies according to the size of your loan.
Initial payment holiday: You are granted an initial three-month payment holiday and only start paying off your Home Loan in your fourth month.
Features:
108% loans
Max 30 year repayment term
Fixed or Variable interest rates
Requirements:
Minimum loan amount of R100,000
First-time buyer
Single or joint gross monthly income of R5000 or more
ABSA Home Loans: FIRST-TIME HOME LOAN
This uniquely structured facility assists first-time home buyers to fund the transfer and registration costs via their home loan.
Even though one home loan is granted, the account is set up in such a way that the cost portion is separate from the purchase price. By structuring costs over a shorter repayment period means you pay less interest, however, you can select any term as long as it doesn’t exceed the term of your primary loan.
Features:
108% loans
Max 30 year repayment term
Fixed or Variable interest rates
Life insurance is compulsory. Disability and retrenchment cover is optional.
Requirements:
A single monthly income of R6 000 or a joint monthly income of R10 000 is required
The minimum loan amount is R120 000
FNB Home Loans: BOND PLUS
Bond Plus offer you finance of up to 108% of the value of the property to cover the cost of registering your bond.
Benefits:
Helps you cover additional expenses
You can choose either the fixed- or variable interest rate option
Minimum bond amount of R240 000 up to a maximum of R1 million
No deposit is required
Bond Plus if specifically designed to finance your primary residence and can therefore not be used to purchase a holiday home, or a property which you intent to rent out.
Standard Bank Home Loan: JUMPSTART
JumpStart gives home buyers the opportunity to buy a home even when they cannot afford the deposit and upfront costs. This homeloan helps you by offering a higher loan to assessed value of your property – a maximum loan to value (LTV) of 108% is allowed.
Features:
108% loans
Max 30 year repayment term
Fixed or Variable interest rates
3 Month Payment Holiday
The following criteria apply:
All homebuyers who want to include bond costs
single or joint income must be R6,000-00 or more a month
permanent employment; and
you need to be 21 years or older
Hi there , I have just purchased a property under 500 000, and am required to pay Reg fees as well as the transfer costs. To my knowledge am i still eligible for the transfer costs or has this not been wiped away for homes under 500 000
Great research. Just a couple of questions if you don’t mind answering…
Is it possible to take out a 30 year loan, but not at 108% of the bond? Also wouldn’t it be better to take out a 30 year homeloan but repay the loan based on what a 20 year loan would cost? Wouldn’t you save more?
I’m going to be a first time home buyer soon, and would like to find out a little more about homeloans etc.
Thanks.
Hi Jason,
As you can imagine, the interest charged on a home loan plays a large part in how much you’ll end up saving / paying for you new home.
The interest rate you’ll be offered is based on the risk the bank is taking in granting you the mortgage. The lower the risk (the more like you are to pay off the bond) the better you interest rate will be. The higher the risk, the higher the rate.
If you apply for a 30-year you’ll most likely get a higher interest rate but there are other benefits to this.
For a more detailed explanation read this article.
Or complete this online form and one of our bond consultants will contact you.