Buying a Home
Answers to the most common questions South African home buyers ask.
How much deposit do I need to buy a house in South Africa?
There's no fixed minimum by law - South African banks offer 100% home loans. However, a deposit of at least 10% significantly improves your approval chances and often results in a better interest rate. On a R1.5 million property, 10% is R150 000. Remember: even with a 100% bond, you still need cash for transfer duty and attorney fees - budget an additional R50 000 to R150 000 depending on the property price.
What is pre-qualification and do I need it?
Pre-qualification is an assessment of how much a bank is likely to lend you, based on your income, expenses, and credit profile. It's not binding but it's very useful: it sets a realistic budget, makes you more credible to sellers, and often reveals any issues you need to fix before applying. Get pre-qualified through a bond originator (like ooba or BetterBond) - it's free and takes about 20 minutes.
What is an Offer to Purchase (OTP)?
An OTP is the written contract that forms the basis of every property sale in South Africa. When a buyer submits an offer and the seller accepts it (by signing), it becomes a legally binding agreement. It sets out the purchase price, any conditions (typically bond approval within 21-30 days), the occupation date, and what's included in the sale. Read every word before you sign - you can't simply change your mind afterwards.
What is transfer duty and who pays it?
Transfer duty is a government tax paid by the buyer when purchasing property. Under the SARS rates effective from 1 April 2026, properties up to R1.21 million are exempt. Duty is R8 700 on a R1.5 million property and R67 200 on a R2.5 million property. Transfer duty is separate from conveyancing fees - both are paid by the buyer. New builds from VAT-registered developers are exempt from transfer duty (VAT is included in the price instead).
How do South African home loan interest rates work?
South African home loans are variable rate - your interest rate moves with the prime lending rate, which is tied to the SARB repo rate. The prime rate is typically repo + 3.5%. Your bond rate is prime plus or minus a margin based on your risk profile. A strong borrower with a deposit might achieve prime minus 0.5% or better. For every 25 basis point rate change, a R1.5 million bond repayment changes by approximately R285 per month.
What is a sectional title property?
Sectional title means you own your specific unit (apartment, townhouse) plus an undivided share of the common property (gardens, pool, building structure, entrance). You're part of a body corporate with all other owners, which collectively manages and maintains the common areas. You pay a monthly levy to fund this. Before buying, check the body corporate financials, reserve fund level, and any pending special levies.
What is the FLISP subsidy for first-time buyers?
The Finance Linked Individual Subsidy Programme (FLISP) provides a once-off subsidy to qualifying first-time buyers with a monthly income between R3 501 and R22 000. The subsidy ranges from R27 960 to R121 626 depending on income and can be used as a deposit. Applications are made through the bank or bond originator. You must be a South African citizen, married or cohabiting, and buying a property between R100 000 and R1.8 million.
How long does the property transfer process take?
Typically 6-12 weeks from the date the OTP is signed. The main stages are: FICA collection and instruction (week 1-2), rates clearance from municipality (week 2-6), document preparation and signing (week 4-8), lodgement and registration at Deeds Office (week 8-12). The biggest variable is the municipality - City of Johannesburg can take 6-10 weeks for rates clearance; City of Cape Town typically 4-6 weeks.
Can I buy property in South Africa as a foreigner?
Yes. South Africa places no restrictions on foreign nationals buying residential property. You can own in your own name, through a company, or through a trust. Non-residents can get South African home loans but banks typically lend a maximum of 50% of the purchase price. When you sell, a withholding tax (7.5% for individuals) applies on the gross sale amount as a deposit against any CGT liability.
What does a bond originator do and should I use one?
A bond originator submits your home loan application to multiple banks simultaneously and manages the process on your behalf. The service is free to you - they earn a commission from the bank on successful registration. Benefits: multiple bank submissions increase approval chances, banks compete resulting in better rates, and originators know what each bank requires. The main originators are ooba Home Loans and BetterBond. Yes, use one.