Property Finance — Frequently Asked Questions

Generally no. Banks finance the purchase price of the property, not the transfer and bond costs, so you must pay those costs in cash up front. Some banks will, on a case-by-case basis, grant a bond of slightly more than the purchase price (a “costs-inclusive” bond) to help cover registration costs, but this is the exception, requires strong affordability and a property valued above the price, and is never guaranteed. Budget to pay the costs in cash.

From acceptance of the Offer to Purchase to registration usually takes about 8 to 12 weeks. Once the attorneys lodge the documents at the Deeds Office, the examination process itself typically takes 7 to 10 working days before registration. Delays are most often caused by outstanding rates clearance figures, slow finance approval, or bond cancellation on the seller’s side rather than the Deeds Office itself.

Banks can grant 100% bonds, so a deposit is not always required — particularly for first-time buyers with a strong credit profile. However, a deposit of 10% to 20% lowers the bank’s risk, usually earns you a better interest rate, and reduces your monthly repayment. Remember you also need cash for transfer and bond costs, which the bond does not cover.

Transfer duty is a tax paid to SARS on the value of the property, calculated on a progressive sliding scale (nothing is payable below R1,210,000). Transfer costs are the conveyancing attorney’s professional fees plus Deeds Office charges and disbursements for putting the property into your name. Duty is a tax; transfer costs are fees. Our Transfer Costs Explained guide covers this in detail.

No. When you buy a new unit from a VAT-registered developer, the price already includes 15% VAT, which the developer pays to SARS. Because a transaction attracts either VAT or transfer duty but never both, no transfer duty is payable. You do not pay the VAT again on top of the advertised price.

The bond initiation fee is a once-off charge by the lender for setting up your home loan. It is capped at R6,037.50 under the National Credit Act. Some banks run promotions that waive or refund it, and a bond originator can sometimes negotiate it down, but you should budget for it as a standard cost. It is often added to the bond and repaid over the term rather than paid in cash.

The main cash costs are transfer duty (if applicable), the transferring attorney’s conveyancing fee, the bond registration attorney’s fee, the Deeds Office registration fees and the bank initiation fee. On a R1.5 million home these can add up to well over R50,000. Use our bond calculator’s “Cash Required” tab to see the exact total for your purchase price.

A 30-year term gives you a lower monthly repayment, which improves affordability, but you pay significantly more interest over the life of the loan. A 20-year term costs more each month but builds equity faster and saves a large amount of interest. You can also take a 30-year bond for flexibility and pay it off faster by adding extra to your instalment when you can.

It uses the standard amortising loan formula: PMT = (L × r) ÷ (1 − (1 + r)^−n), where L is the loan amount (price less deposit), r is the monthly interest rate (annual rate divided by 12 and by 100) and n is the number of monthly instalments. In the early years most of each instalment is interest; over time more goes to capital. Our calculator shows this split and a full amortisation schedule.

A bond originator submits a single application to multiple banks on your behalf, compares the offers and negotiates your interest rate — at no cost to you, because the bank pays their commission. Using one can secure a lower rate than approaching a single bank, and saves you the effort of applying to each lender separately. There is no obligation to accept any offer.