All four South African banks offer home loans with both fixed rate and variable interest options that can be paid back over a given period of time, from five to 30 years. They also all have a range of options, and most will finance vacant land, homes and also building projects, within their own set of rules. Here is a smattering of information about the four of them.

Absa home loans

Absa Bank caters for individual people and couples who earn either above or below R15 000. They are willing to finance 100% loans for smaller loans, and will tailor-make home loans for their own existing clients. Absa also has a home loan package for people who want to buy and then rent out the property.

First National Bank loans

Like Absa, FNB has options for both individuals and couples who earn up to R15 000 or more than R15 000. FNB has also created specialised packages for both foreigners wanting to invest in domestic property in South Africa, and Muslims who are bound by the Islamic faith that does not allow any form of money interest. FNB's IslamicFinance package isn't limited to those of the Muslim faith, but it is only available for bonds in excess of R240 000.

Nedbank home loans

While Nedbank will finance both vacant land as well as houses, they appeal to the higher end of the market, and they don't offer specific deals for first time home buyers or those people who earn a small monthly income. Like Absa, Nedbank has a specific home loan for those who want to buy and then rent the property out. Clearly aiming at people who aspire to being successful, Nedbank does have a different type of home loan – and this allows borrowers to apply for an amount which is more than the value of the property that they are buying. This additional money is not paid out when the bond is registered, but it is available later, when the property is worth more or when the borrower is able to afford a larger repayment figure.

Standard Bank home loans

Standard Bank caters for the lowest income bracket, offering DreamStart home loans to entry-level home buyers who earn between just R1 500 and R6 000 a month. Standard also has home loans available for first time buyers who earn at least R6 000 both jointly (husband and wife) or on their own. Their standard (or ordinary) home loans are offered to anyone in permanent employment who earns more than R6 000. It will be up to you to decide whether this bank offers the best home loan or whether you will find it at another financial institution.

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Absa Home Loan

The standard-type home loan from Absa is described as a "flexible home loan" that may be used to finance residential properties and vacant land. There are various options available to home buyers, including a choice between a variable interest rate and fixed interest over the period of the loan. Similarly, buyers may choose between repaying the loan over an extended period of time (as long as 30 years if they wish) or paying it off as quickly as possible, using the FastForward home loan option. Both options have their advantages, depending on the circumstances of the buyer.

Those people with Absa home loans also have the advantage of accessing money that has been paid into the loan at a future date. Products include Absa's FlexiReserve (which gives access to prepaid or advance funds that have been paid), FurtherAdvance (for those who want to finance other purchases or debts using the lower home loan rate of interest), Readvance (which provides access to the difference between the loan granted and the outstanding balance of the loan), and MultiPlan (which enables home loan customers to split their loan into separate accounts, some with a variable interest rate and some with a fixed rate). Generally to be able to access money from your bond account you will need to pay higher monthly repayments to increase the equity in the home loan. This idea is promoted by Absa as a kind of savings plan that saves extra money because deposits are deducted from the outstanding loan balance, which reduces the interest without attracting tax, which interest on a savings account might do.

MyHome Home Loan

This home loan option has been tailored for South African home buyers who regularly earn R15 000 or less every month, singly or jointly. The bank will look at financing 100% of the loan – which means borrowers do not necessarily need to put down a deposit. They are also often willing to make an additional 10% available for transfer and registration costs. The MyHome home loan is available over any term of repayment, up to 30 years, and there is a range of fixed rates available. This means that the repayments remain the same throughout the repayment period of the loan.

Buy-to-Let Home Loan

Absa also offers a customised Buy-to-Let home loan package which allows the rental income to be used to service all or a portion of the repayments.

Home loans for existing customers

Absa will tailor-make a competitive home loan agreement for its valued customers. Consultants will help customers calculate home much they can afford and then discuss the benefits of the different options, whether they earn R15 000 a month or R150 000 a month, because they prefer their customers to take out Absa Bank Home Loans. The bank also has financing options for those wanting to build or refinance properties.

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Is it for you?
Absa Home Loans is for you if you are buying a home, building, improving your existing home, using the equity in your home to manage debt, using additional funds or investing in property.

Recource: Absa Home Loans

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