Home Loans For SA Citizens Living Abroad

This guide looks at the home loan requirements for South Africans living and working overseas, but are looking to purchase property in South Africa.

Related Topic: Home Loans For Foreigners Buying In South Africa

The majority of our banks such as Absa, Standard Bank, FNB, Nedbank, SA Home Loans, and Investec approve home loans for South Africans Living and Working Abroad. The key question is just how much are they willing to finance? The Loan-to-Value percentages vary between 50% and 90% depending on the merit of each individual application and its unique set of circumstances.

The Major Factors That Positively Influence Your Application

Based on over 13 years of experience, some of the major factors that positively influence their decisions are:

  • qualified professionals
  • permanent employment
  • previous buying record
  • existing and good standing credit profiles
  • active local bank accounts
  • an excess of 20% cash deposit
  • positive asset portfolio ie savings, investments, etc

Note: Another important factor to note is that an application to permanently emigrate must not have been made, nor a surrender of permanent residency status in SA.

Keep At Least One Credit Account Active In SA

Preparation is always half the job done, in saying so it is best to set up a local bank account with at least two of the major financial institutions in SA and transfer funds each month to maintain and build a relationship whilst saving up the capital deposit required to purchase a property locally. Many SA citizens make the common mistake of closing every account in SA when moving abroad.

However, it is important to keep at least one or two credit accounts active even if it means only paying the monthly account fees to do so. This will save a lot of hassle in securing a good loan amount as well as an attractive interest for that future property purchase.

The Documents Required

There are a set of standard documents that would always apply when approaching the bank for property finance, these are grouped under the affordability assessment documentation which pertains to verification of income and employment.

Then there is the wider scope of documents pertaining to the specific type of property purchase involved. For example, when purchasing a vacant plot and building, you will require approved architectural building plans from the local municipality, a builder’s contract confirming the start and end date of the project, costing and finish schedules, as well as terms of progress payments. For these specific loans, the banks would only finance up to 80% maximum of the projected cost, and it’s always advisable to have a little extra cash flow to support any unplanned for building expenses.

When securing home loans for South Africans living abroad, there are two main categories that we can divide this specific type of applicant into:

  1. The first are those South Africans who have taken up employment outside SA borders, and have set up full international banking accounts to where their monthly salary deposits are made.
  2. Then there are those applicants who work for an international company, but who are still able to deposit their monthly salaries directly into a local South African banking account.

In both these circumstances, it is important to note that the salaries are derived from an international employer, and are paid in foreign currency.

Because the salary income is generated from a foreign source, the bank will score your application for a lower loan percentage. This is due to the higher risk attached to these types of home loan applications.

While we could argue most SA citizens living abroad are actually earning higher salary brackets and therefore are likely to have more disposable income to service their monthly bond repayments, the banks are having to consider the historical data that points to the fact that:

  1. the majority of SA citizens working abroad will return locally to take up permanent employment in SA usually within an average of 5 years
  2. since the home loan repayment term is set over a 20 year period, the bank will need to account for when the salary will be localised and reduced to ZAR currency in the future years to come, which largely amounts to the reason of a lower percentage loan offer

Home Loans for South Africans living and working abroad presently start from as low as 50%, and go up to a maximum of 90% of the property purchase price.

How To Secure A Bigger Bond And Improve Your Chances Of Approval?

To ensure that this specific type of application is processed favourably, it’s best for temporary expatriates to still continue managing at least one local bank account and a few credit accounts in SA whilst living and working abroad. This will help to keep an active payment profile and improve the overall scoring of the bond application.
An active track record of credit account repayments and bank transactions in SA assures the bank of payment commitments even whilst applicants are managing bulk of their banking transactions abroad.

I personally would suggest keeping an active account running with ABSA, as we have secured up to 90% of property prices through ABSA Home Loans for expatriates, as opposed to lower loan ratio percentages from the remaining major banks.

Should you need further information, please contact us.

2 comments on “Home Loans For SA Citizens Living Abroad”

  1. Good day,

    If South African citizens are working abroad and getting their salary paid into their local bank accounts of the country they are working in, would this mean that they would thus be unable to secure a home loan in SA with a local bank because the bank does not have any proof of income? Would we be able to use proof of income statements from our bank accounts of the country we are working in? It seems like it is a hopeless case, with the responses I am receiving from people. I intend to purchase a property in South Africa and have been saving to put down a 30 % deposit. But will this even matter, if banks are going to disregard my application because of the proof of income matter. Please help. Thank you.

    • The local banks in South Africa are still keen to finance citizens living and working abroad, even whilst their salaries are banked in an offshore account. The banks will call for 3 to 6 months official bank statements that your income is directly paid into abroad, as well as confirmation of your salary from your employer, and an employment contract. As long as this is in place they will consider it. Each application is viewed on merit, for example, having an existing credit profile locally in SA will be to a big advantage, as well as having a local bank account that is still active in SA. All of these factors will determine the Loan-To-Value percentage the bank will be willing to consider, which can range anywhere between 50% and 75% in these instances. Your first step would be to email our senior home loan consultant Olen Sterling directly at olen@propertyloans.co.za to further assist with your enquiry as she has assisted a range of South Africans living and working abroad.


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