Last updated 23 September 2026 · Written by Kgothatso Moleke · Prime rate 10.75% · General information, not financial advice
The short version: a bank will lend you roughly what it thinks you can repay, at a rate set largely by your credit record. The purchase price is not the number that matters. You also need cash for transfer duty, attorneys and bond registration, and those costs cannot be added to the bond. Get your record right before you apply, because the rate you sign lasts twenty years.
What a bank actually assesses
Three things, in this order.
- Affordability. Required by the National Credit Act. The bank works out your gross income, subtracts tax, existing debt repayments and living expenses, and sees what is left. That surplus determines the size of the bond.
- Your credit record. This sets the interest rate you are offered, and whether you are offered anything at all. It is also the part you can change.
- The property. The bank values it independently. If its valuation comes in below the price you agreed, it lends against the valuation, and you cover the difference.
Banks are more conservative on bonds than on cars or personal loans, because the amount is larger and the term is longer.
The cash you need that is not the deposit
This is what catches first-time buyers. Beyond any deposit, there are once-off costs payable in cash, and they cannot be rolled into the bond.
Transfer duty
A tax paid to SARS on the property value. Rates effective from 1 April 2025:
| Property value | Transfer duty |
|---|---|
| Up to R1,210,000 | None |
| R1,210,001 to R1,663,800 | 3% of the amount above R1,210,000 |
| R1,663,801 to R2,329,300 | R13,614 + 6% above R1,663,800 |
| R2,329,301 to R2,994,800 | R53,544 + 8% above R2,329,300 |
| R2,994,801 to R13,310,000 | R106,784 + 11% above R2,994,800 |
| Above R13,310,000 | R1,241,456 + 13% above R13,310,000 |
What that means in practice: a R1.2 million property attracts no transfer duty at all. A R1.5 million property attracts R8,700. A R2 million property attracts R33,786. The jump is steeper than most people expect once you cross R1.66 million.
Worth knowing: buying below R1,210,000 avoids transfer duty entirely. If you are close to that line, the saving is real money and worth factoring into what you offer.
Attorney and registration costs
- Transfer attorney fees. The conveyancer who transfers the property into your name. Scaled to the property value, paid by you as the buyer, even though the seller usually appoints them.
- Bond registration costs. A separate attorney registers the bond at the Deeds Office. Scaled to the bond amount.
- Deeds Office fees, FICA and admin. Smaller, but they add up.
These are scaled by value and change over time, so get a written quote from the conveyancer rather than relying on any figure you read online, including here. Ask for it early: it is the number that decides whether you can actually complete the purchase.
Then the monthly costs
Owning is not just the bond repayment. Budget for municipal rates, levies if it is a sectional title or estate, home insurance on the building (your bank will require it), household contents insurance, and maintenance. A bond repayment you can just afford becomes one you cannot once these land.
What your credit record is worth here
Bonds are priced off prime, currently 10.75%. A strong record can get you prime or a little below. A patchy one gets you prime plus a margin, or a demand for a deposit, or a decline.
On a R1.5 million bond over twenty years, the difference between 10.75% and 12.75% is roughly R2,079 a month. Over the full term that is R498,898 — a third of the purchase price again, for the same house.
This is why the order matters. Fix the record, then shop. Not the other way round. The credit repair roadmap covers how, and it takes months rather than years.
Does a deposit help?
Yes, in three ways. You borrow less, so the repayment is lower. Banks often price a deposit-backed bond better, because their risk is lower. And it protects you if the bank’s valuation comes in under the purchase price.
100% bonds exist in South Africa and first-time buyers do get them. But a deposit improves both what you are offered and what it costs you. If you are choosing between a bigger deposit and a bigger house, the deposit usually wins.
Apply to more than one bank
Different banks assess the same applicant differently and quote different rates. Going only to the bank you already bank with is the most common and most expensive mistake in this process.
Bond originators submit one application to several banks at once and are paid by the bank that wins, not by you. That is worth understanding: it costs you nothing, and it also means they are incentivised to close a deal rather than to talk you out of one.
Applying to several banks in a short window for the same purchase is normal and expected. It is not the same as scattering applications across store accounts and loan apps, which is what actually reads badly on a credit record.
Fixed or variable rate?
Most South African bonds are linked to prime, so your repayment moves whenever the Reserve Bank moves the repo rate. You can request a fixed rate for a period, usually at a premium over the linked rate.
Fixed buys certainty and costs money for it. Variable is cheaper today and exposes you to rate increases. The honest guidance: if a two-point rate rise would break your budget, you have bought too much house, and fixing the rate only postpones that problem.
The order that works
- Pull your credit reports from all four bureaus and fix what is wrong. Six to twelve months before you plan to buy, if you can.
- Clear short-term debt. It reduces your repayments, which directly increases the bond you qualify for.
- Stop applying for credit. No store accounts, no loan apps, for at least six months before the bond application.
- Work out what you can carry, including rates, levies and insurance, not just the bond. The affordability calculator is a starting point.
- Save the cash costs separately from the deposit: transfer duty, attorneys, bond registration.
- Get pre-approval so you know your number before you fall in love with a house.
- Apply to several banks and compare the rate, not just the approval.
If you are declined
Ask why, in writing. You are entitled to know. It is almost always one of three things: your credit record, your affordability, or the property valuation.
A record problem is fixable in months. An affordability problem means either less house or less existing debt. A valuation problem means the price is wrong, not you. Each has a different answer, which is why the reason matters more than the decline.
The credit health checklist gives you a read on where you stand in about a minute.
Sources
- South African Revenue Service — transfer duty rates effective 1 April 2025
- South African Reserve Bank — repo rate raised to 7.25% on 23 September 2026, prime 10.75% effective 25 September
- National Credit Act 34 of 2005 — affordability assessment requirements
This guide is general financial education, not advice about your circumstances. Transfer duty rates, interest rates and attorney fees change. Confirm current figures with SARS, your bank and your conveyancer before committing.