SA Home Loans set new record

In the News: Sa Home Loans

Despite facing a number of minor setbacks over the past year, SA Home Loans has managed to increase its new business by between 20 percent and 25 percent.

Talking to the Business Day, SA Home Loans Chief Executive Kevin Penwarden said, the companies increase in new business and largely due to the development of value-added products which are backed up by good service.

R2 Billion Worth of Home Loan Applications

As a result Sa Home Loans have received a record R2 billion worth of home loan applications in the August this year, easily beating the previous record of R1.6 billion set in November 2004.

SA Home Loans

Over the past year SA Home Loans has raised its market share by 5 percent, increasing its number of clients by 82 percent to 80 000.

But the company has had to over come a few challenges recently. Other South African home loan providers such as ABSA, FNB and Nedbank, are offering better interest rates, and these large mortgage lenders are also defending their existing client base in an attempt to improve their market share.

Penwarden explains: “During the first five years, SA Home Loans was left alone by the other home loan providers and was consistently able to offer interest rates of up to 2 percent below prime, while the banks were only offering between 1.5 percent and 1.75 percent [below prime] to the best clients.

“Then in 2004, the Johannesburg Interbank Acceptance Rate [Jibar], to which the SA Home Loans rate is linked, started to move away from its long-term trend to an average of 1.5 percent below prime.

“At the same time, the banks repriced their new offerings at 2 percent below prime for their select clients. The Banks also became very aggressive in defending their book in the feeding frenzy for market share,” he said.

SA Home Loans remains competitive for its niche market, which is households with a minimum income of R7000 per month.

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Also See:
Home Loans Advice
SA Home Loans News

Related Topics:
* New Home Loan Product Launched
* Sa Home Loans to raise R15bn
* Home Loan Applications increasing

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