How to Qualify for a Home Loan in South Africa

Buying a home is a big step. To get approved for a home loan, banks check if you can afford the property and manage repayments. Here’s what you need to know.

1. Credit score

• Banks use your credit history to judge risk.
• A score above 600 improves your chances.
• Pay off debt, avoid defaults, and keep accounts up to date.
• Check your credit report for free once a year with Experian, TransUnion, or Compuscan.

2. Income and affordability

• Lenders use the 30% rule: your bond repayment should not exceed 30% of gross monthly income.
• Example: If you earn R30,000 per month, your bond repayment should be under R9,000.
• Stable income through permanent employment or a registered business strengthens your application.

3. Deposit

• Many banks finance 100% loans, but approval is easier with a 10%–20% deposit.
• A deposit reduces your loan amount and interest costs.

4. Expenses and debt

• Banks assess monthly commitments like car finance, credit cards, and personal loans.
• High debt-to-income ratios lower your chances.
• Aim to keep debt repayments below 40% of income.

5. Documentation required

• ID copy
• 3 months’ payslips
• 3–6 months’ bank statements
• Proof of residence
• If self-employed: financial statements and tax clearance

6. Pre-approval

• Use a bond originator or bank pre-qualification tool.
• Shows how much you qualify for and strengthens your offer to purchase.

7. Government support (FLISP)

• If you earn between R3,501 and R22,000 per month, you may qualify for a FLISP subsidy.
• This helps with a deposit or reduces the loan amount.

Tip: Pay all accounts on time, reduce debt, and save a deposit. These steps make banks more confident to approve your bond.