Question 1

How accurate are these home loan calculators?

Accepted Answer

They use the same amortisation maths a bank uses, so the monthly figure is close. What they cannot know is your credit profile, which is what decides the rate you are actually offered. Treat the result as a planning number, not a quote.

Question 2

How much deposit do I need to save for a home?

Accepted Answer

Many first-time buyers in South Africa qualify for a 100% bond and need no deposit at all. A deposit still helps: it lowers your monthly repayment and can earn you a better rate. On a new development there is also no transfer duty to find.

Question 3

What interest rate should I use for bond calculations?

Accepted Answer

Start with prime. Your actual rate is set against prime based on your credit record, so a strong profile can come in below it and a thin one above. Run the numbers a percent either side to see how much room you have.

Question 4

Do extra payments really reduce interest on my bond?

Accepted Answer

Yes, and by more than most people expect. Because interest is charged on the outstanding balance, every extra rand goes straight at the capital. A few hundred rand a month can take years off a twenty year bond.

Question 5

How do I know what home price I can afford?

Accepted Answer

Banks work on roughly 30% of your gross monthly income going to the bond, but what is genuinely left after your expenses matters just as much. The affordability calculator takes the lower of the two, which is the honest number.

Question 6

Can I qualify for a home loan with my income?

Accepted Answer

Most first-time buyers are surprised by how little income is needed for entry-level homes. If you earn under R22 000 a month you may also qualify for the government's First Home Finance subsidy, which is paid on top of your bond.

Numbers first, house second.

Bond repayment

Deposit saving

Affordability

Extra payments

Know the number before anyone asks you for it.

Questions about the numbers

Now see the homes behind them.