How home loans work in South Africa
A home loan (or bond) is a long-term loan secured against the property you're buying. You repay it monthly over a fixed term — usually 20 years — at an interest rate linked to the SARB prime rate. Each repayment covers interest first, with the rest reducing the principal.
Early in the term, most of your payment is interest. Over time the balance shifts and more goes to principal. Paying even a small extra amount monthly can knock years off the bond and save you tens of thousands in interest.
Beyond the monthly payment
When you buy a home, also budget for transfer duty, bond registration fees, attorney costs, valuation fees and homeowner's insurance. These typically add 8–10% on top of the purchase price.
Frequently asked questions
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