Last updated: 16 October 2026
Buying your first home is a big step. Most South Africans need a home loan, also called a bond, to do it. This guide explains what banks look for, the real costs beyond the price, and the government’s First Home Finance subsidy.
First-time home loan at a glance
- Prime lending rate: 10.75% (after the Reserve Bank’s 23 September 2026 decision)
- Affordability rule of thumb: many banks want your bond repayment at or below about 30% of gross income
- Transfer duty: none on properties up to R1,210,000 (SARS)
- Max home loan interest under the NCA: repo + 12% a year
- First Home Finance (formerly FLISP): for households earning R3,501 to R22,000 a month
- Regulator for credit: National Credit Regulator (NCR), ncr.org.za
How a home loan works
A bank lends you money to buy a property. The loan is registered against the property at the Deeds Office. You repay it in monthly instalments, often over 20 years.
If you stop paying, the bank can take legal steps to sell the property. That is why affordability matters so much.
Most home loans use a variable rate linked to prime. When prime goes up, your instalment goes up.
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Home loan requirements
Each bank has its own rules. Most will ask for:
- A valid South African ID (or valid permit for permanent residents)
- Your latest payslips
- Recent bank statements (ask the bank how many months it needs)
- Proof of address
- A signed offer to purchase (once you have found a home)
- Extra documents if you are self-employed, such as financial statements
The bank will also check your credit record, your existing debt and your monthly expenses.
How much can you afford?
Many South African banks use a simple guide. Your bond repayment should not be more than about 30% of your gross monthly income. This is bank practice, not law. Banks also look at your other debts and living costs.
The table below is an illustration only. It assumes a 20-year loan at the current prime rate of 10.75%.
| Loan amount | Monthly repayment (approx.) | Gross income for 30% rule (approx.) |
|---|---|---|
| R500,000 | R5,076 | R16,920 a month |
| R1,000,000 | R10,152 | R33,840 a month |
Over 20 years, a R1,000,000 loan at 10.75% adds up to about R2.4 million in repayments. Your actual rate depends on your risk profile and the bank’s offer.
Do you need a deposit?
Some banks offer 100% home loans to qualifying buyers. That means no deposit. But a deposit still helps you:
- Lower your monthly repayment
- Pay less interest over the life of the loan
- Improve your chances of approval
- Possibly get a better interest rate
Even with a 100% loan, you will still need cash for once-off costs.
The once-off costs of buying
The purchase price is not the only cost. As a buyer, you usually pay the following:
1. Transfer duty
Transfer duty is a tax paid to SARS. The current SARS table applies from 1 April 2025 and stayed the same from 1 April 2026.
| Property value | Transfer duty |
|---|---|
| R0 to R1,210,000 | 0% |
| R1,210,001 to R1,663,800 | 3% of the value above R1,210,000 |
| R1,663,801 to R2,329,300 | R13,614 + 6% of the value above R1,663,800 |
| R2,329,301 to R2,994,800 | R53,544 + 8% of the value above R2,329,300 |
| R2,994,801 to R13,310,000 | R106,784 + 11% of the value above R2,994,800 |
| Above R13,310,000 | R1,241,456 + 13% of the value above R13,310,000 |
Example: on a R1,500,000 home, transfer duty is 3% of R290,000, which is R8,700. If you buy from a VAT-registered developer, VAT is usually included in the price and transfer duty does not apply.
2. Transfer attorney fees
The transfer attorney (conveyancer) moves ownership into your name. The buyer pays these fees. They are based on guideline tariffs and rise with the property price.
3. Bond registration costs
The bank appoints a bond attorney to register your loan at the Deeds Office. You pay this attorney’s fees plus Deeds Office fees. The cost is based on the bond amount.
4. Bank initiation fee
Under the National Credit Act, a home loan initiation fee is capped at R1,100 plus 10% of the amount above R10,000. The maximum is R5,250, excluding VAT. Some banks let you add it to the loan.
5. Other costs
- Moving costs
- Municipal deposits for water and electricity
- Repairs or basic furniture
Ask the attorneys for a written cost estimate early. Online calculators from banks and attorneys can also help you plan.
Monthly costs after you move in
- Your bond repayment
- Municipal rates and taxes
- Body corporate levies, if you buy in a complex
- Homeowner’s insurance, which banks normally require
- Life cover, which many banks require to settle the bond if you die
- Maintenance and repairs
Read our guide to life cover in South Africa before you accept the bank’s policy.
First Home Finance (formerly FLISP)
First Home Finance is a once-off government grant for first-time buyers. It was previously called FLISP. It is not a loan, so you do not repay it. The National Housing Finance Corporation (NHFC) administers it.
Who qualifies
- South African citizen, or permanent resident with a valid permit
- 18 or older and legally able to sign contracts
- Total household income of R3,501 to R22,000 a month
- Never received a government housing subsidy before
- Never owned a home before
- A household with a partner or financial dependants
How much you can get
The amount depends on your income. Lower earners get more. The Western Cape Government lists a range of R38,911 to R169,264. Check the current table with the NHFC before you plan around a figure.
What it can be used for
- Reducing the home loan amount you need
- Buying an existing home or flat
- Buying a serviced site or building on one
- Some transfer and bond costs, in certain cases
How to apply
- Go to fhf.nhfc.co.za and click “Check Eligibility.” No registration is needed for this step.
- Register and log in to the portal.
- Apply for pre-approval if you want an early answer (optional).
- Click “Apply now” and complete every section.
- Upload your documents. The checklist is on firsthomefinance.co.za.
- Submit. The NHFC says processing can take up to 21 working days.
Application windows open and close. At the time of writing, the official site showed the current window closing on 30 October at 17:00. Check firsthomefinance.co.za for the latest status. The NHFC’s First Home Finance line is 010 085 2199.
Step-by-step: buying your first home
- Check your credit report. See how to check your credit score for free.
- Pay down small debts. This improves affordability.
- Save for costs. Plan for transfer, bond and moving costs.
- Get pre-qualified. This tells you roughly what a bank may lend.
- Check First Home Finance. See if your household income qualifies.
- Find a home and sign an offer to purchase. Make it subject to bond approval.
- Apply for the bond. You can apply to more than one bank to compare offers.
- Accept the best offer. Compare interest rates, not only instalments.
- Sign at the attorneys. Pay transfer costs when asked.
- Registration. Once registered at the Deeds Office, the home is yours.
Common mistakes
- Borrowing the maximum the bank offers, leaving no room for rate increases
- Forgetting transfer and bond costs
- Taking on new credit, like a car loan, during the bond application
- Signing an offer to purchase without a bond approval condition
- Not budgeting for levies, rates and maintenance
Scam warning
Property scams can cost you your savings. Watch out for:
- Emails or WhatsApps telling you the attorney’s bank details have “changed”
- Rental or sale “agents” asking for a deposit before you view the home
- People who charge a fee to “guarantee” your First Home Finance approval
- Loan offers that require an upfront fee
Always phone the attorney’s office on a number you have checked yourself before paying. The NHFC applications are done on its own portal.
Frequently Asked Questions
Can I buy a house with no deposit in South Africa?
Some banks offer 100% loans to qualifying buyers. You still need cash for transfer and bond costs.
Do first-time buyers pay transfer duty?
Not if the property costs R1,210,000 or less. Above that, duty is charged on a sliding scale set by SARS.
What salary do I need for a R1 million home loan?
At 10.75% over 20 years, the repayment is about R10,150 a month. Using the 30% guide, that suggests a gross income of around R33,800. Each bank decides for itself.
Is FLISP still available?
FLISP is now called First Home Finance. It is run by the NHFC for households earning R3,501 to R22,000 a month. Check firsthomefinance.co.za for open application windows.
Can two people apply together?
Yes. A joint application combines both incomes. Both people are then responsible for the full loan.
Related Guides
- Personal Loans: How to Compare Costs Safely
- Debt Consolidation Loans: Pros, Cons and Risks
- How to Check Your Credit Score for Free
- Life Cover in South Africa
- Debt Review in South Africa
Conclusion
A first home is possible with planning. Know what you can afford, budget for once-off costs and check whether First Home Finance can help. Compare bank offers carefully, and never pay anyone outside official channels.
Disclaimer: This article is general information only and is not financial advice. Wiz Admissions does not offer or endorse any bank, lender or bond originator. Rates, costs and subsidy rules change, so confirm details with your bank, attorney, the NHFC and SARS.
