Home loans
What are the costs?
Secured lending
When opening this secured lending door of opportunity with FNB, keep this important question in mind:
What are the costs?
With our full suite of lending solutions, the opportunity to own the home of your dreams, with real help, is right at your fingertips.
- Buying a home is probably one of the biggest investments you will make in your life, and a pre-approval will help you figure out how much you can afford. With a pre-approval you know the exact home loan amount you could qualify for, making this new asset acquisition an easy process with informed decision-making on expenditures.
Get a pre-approval by visiting nav» Home on the FNB App
Do your research and have an idea of the average price of property in the area in which you want to inhabit.
You can access an area report via nav» Home on the FNB App
- Attaining the right knowledge and having a good idea of what the properties in the area have been selling for, is vital. This will give you the estimated value on the specific property you are considering. Should you feel the price is too high, feel free to ask the agent why, and move on if you are not satisfied.
- It is always best to stick to your budget because viewing properties that are more expensive than what you can currently afford, can cause a great deal of frustration and hamper your search for a suitable property.
You can access nav» Home on the FNB App for a useful home loan repayment calculator
- This bond calculation can assist in knowing what the home loan repayments will be.
- Home ownership is about more than just making the home loan repayments. There are other monthly costs that you need to be able to afford.
Costs and fees that need to be paid when buying a property
When you purchase a new property, there are costs associated with it. The upfront costs you can anticipate are as follows:
- Purchase price deposit: This is a payment made to secure the property and this deposit amount is the difference between the loan amount and purchase price
- Registration costs: The attorneys that register your bond on your behalf charge fees for drawing up the necessary paperwork, conducting FICA checks and lodging your bond at the Deeds Office. Fees are usually charged on a sliding scale of which the bond originator will inform you.
- Transferring costs: A fee that is paid by the buyer to the attorney nominated by the seller to transfer ownership of the property.
- Postage and sundry costs: The cost of documents and certificates that the conveyancing attorney will incur in order to register the bond on the property.
- Deeds Office registry: A fixed fee for the local registration of the property and/or loan at the Deeds Office.
- Transfer duties: Transfer duties are payable by the purchaser of the property to the South African Revenue Services (SARS) for properties valued at R900 000 or more. These fees are thus, calculated as a percentage of the purchase price of the property and are dependent on the purchaser's legal status. This payment is payable before the registration of the transfer or within 6 months after signing the OTP agreement. FNB will pay a percentage of their switching costs (registration/attorney fees up to the original bond amount) with the intent to offer competitive rates and exceptional service when applicants apply using nav» Home on the FNB App.
It is crucial to gain an understanding of the upfront costs that come with buying a property before making a final purchase.
- Transfer fees
- Conveyancing fees
- Deposit for the water and electricity account
- Monthly levy duty (if purchasing in an estate as opposed to a stand-alone residential property)
-
Credit score and its implications:
How to determine if you have a good credit score? A higher credit score typically represents good credit health. Lenders are more inclined to lend to people with a higher score and would typically lend money to them at lower interest rates. The lower the credit score, the higher the risk that the individual poses to the bank and thus influences the outcome of the credit application.
How to improve your credit-rating? For a start, avoid paying late or missing payments. People that make their payments on time are considered lower risk borrowers.
Monthly costs you can anticipate are as follows:
- Monthly service fee: A monthly service fee will be charged on all loans for the term of the loan. Fees are charged in terms of the NCA.
- Life and disability cover: This cover ensures that the home loan is paid off in the event of death or permanent disability.
- Monthly home loan repayment: These are the monthly repayments towards the home loan.
- Comprehensive cover: This cover ensures that the property is protected against damages such as fire, flooding, burst geysers, plumbing, and natural disaster.
- Levies (if applicable): Levies payable to the Home - Owners Association or Body Corporate if the property is purchased in a Sectional Title.
- Municipal costs: Rates and taxes, electricity, water, sewerage and refuse collection are all payable monthly. There is also an initial upfront deposit required to activate or connect a municipal account, which is payable to the local municipality.
- Maintenance costs: It is advisable to save on a monthly basis for any maintenance that may be needed for the property.
Glossary
- Service fee: A monthly fee is charged by the bank for maintaining and administering a home loan account. This is also called an administration fee.
- Municipal costs: Rates & taxes, electricity, water, sewerage, refuse collection, deposit to activate or connect municipal account and payable to your local municipality.
- Commission: paid to either an estate agent or any other intermediary selling your property.
- Municipal and legal costs: these costs are directly handled by the estate agent who will sell the property.
- Cancellation and registration costs: should you decide to switch your home loan, FNB will pay for your cancellation and registration costs. We will also take your bond back to the original term of up to 20 years. Get your eBucks back and enjoy personalised interest rates.
- Calculators: Access calculators to find out your monthly home loan repayments or calculate the maximum home loan amount you qualify for.
The South African Revenue Service regarding Capital Gains Tax if this is not your primary residence.
*Note - As a legal entity:
A legal entity is an individual or organisation which is legally permitted to enter into a contract and may be sued if they fail to meet their contractual obligations. A customer becomes a legal entity with the bank when they sign a contract for a home loan.
The mortgage bond is also registered in the name of the legal entity.
