If you do not have enough money to pay the upfront costs, you may want to set your home loan requirement equal to 108% of the purchase price, so that you borrow sufficient money to pay for the upfront costs as well as the purchase price.
-- Bond Registration Fees: R0
-- Property Transfer Costs: R0
Bond insurance is also known as credit life insurance; it protects you (the borrower) by paying out the outstanding bond balance in the event of one or more of the following (depending on what you select):
Whilst this insurance is not legally required, many home loan providers require home loan insurance to be taken out as a condition of the loan, to safeguard the bond repayments in the event of your death or other mishap. Should you die they may need to sell the property from the deceased estate to cover what is owed to you, which is a hassle they'd rather avoid (sometimes compounded by the property selling for less than what is owed). They'll try get you to use their in-house insurer, as this is a profitable sideline. Insurance rates are often not cheapest at the bank offering you the home loan; it pays to shop around. If you already have other life cover, the bank sometimes won’t insist on you taking out home loan insurance.
This protects the lender (bank):
Home owners cover is insurance to protect you against the property structure burning down, floods, or somehow being damaged; this is mandatory but most don't take it out with their home loan provider, as they tend to be more expensive. Unlike home loan insurance (which protects the lender/bank), homeowners insurance protects the property owner and is usually a mandatory requirement by lenders to ensure the asset securing the loan is protected. The home loan provider will check annually that you have home owners cover.
Once you purchase the property you will also need to pay for:
When you eventually have repaid your bond, you may want to cancel it; in addition to the outstanding balance and any bank-related fees, you will have to also pay a cancellation fee to the bond cancellation attorney, as well as Deeds Office postages and VAT (currently about R4800; but it'll increase in the future and the rate applicable at the time you cancel is what you'll pay).
| Period | Principal (R) | Interest (R) | Balance (R) |
|---|
The monthly repayment is calculated using the formula for the present value of a loan with level monthly repayments, starting being repaid one month after the loan is made:
(Loan Amount) = (Monthly repayment) * [(1 - (1+i)^(-n)] / i
Where:
This formula excludes the bank's monthly service fee, property transfer costs, bond registration fees, insurance and municipal rates, electricity, sewage and water, maintenance costs, repairs, kickbacks from the bank's rewards program.
Any fees quoted are subject to change and error; all rates and fees used in the calculators are provided as an indication only; these in no way represent a guarantee that you will be granted a home loan. While we attempt to ensure the accuracy of the calculation, we cannot be held liable for inaccuracies and mistakes. Approach a bank or a bond originator to firm up the numbers for your risk profile; the conveyancing-related fees are subject to negotiation with your chosen property transfer attorneys. Nothing on this page should be construed as advice - approach an attorney or financial adviser for advice.