Before tax and deductions — combined household if applicable
Include rent, car repayments, credit cards, food, insurance, etc.
SA prime rate is currently ~11.25–11.75%
Enter your income and expenses and click Calculate to see your estimated bond qualification.
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Get pre-approved with ooba — free, no obligation →How South African Banks Assess Home Loan Affordability
Getting approved for a home loan in South Africa requires more than just a good income. Banks are required by the National Credit Act (NCA) to conduct a thorough affordability assessment before approving any credit, including home loans. Understanding how this works gives you a significant advantage when applying.
The 30% Gross Income Rule
The most widely used starting point for home loan affordability is the 30% of gross monthly income rule. Banks generally limit total debt repayments — including the new bond — to approximately 30% of your gross (before tax) monthly income. So if you earn R50,000 per month gross, the maximum total debt repayment the bank might allow is R15,000 per month. If you already have R5,000 in existing debt repayments (car loan, credit card minimums), your available bond repayment capacity drops to R10,000 per month.
This is a starting point, not a hard rule. Banks also look at net disposable income — what remains after tax, deductions, and all living expenses. The NCA requires that you can genuinely afford the repayment without experiencing financial hardship.
What Banks Actually Look At
Each bank has its own credit scoring model, but the common factors assessed include:
- Credit score: A score of 650+ is considered good; 720+ may qualify you for preferential rates
- Employment stability: Salaried employees are preferred; self-employed applicants need 2–3 years of financial statements
- Debt-to-income ratio: All existing debt obligations as a percentage of income
- Deposit size: A larger deposit signals lower risk and often unlocks a better interest rate
- Payment history: Late payments, defaults, or judgements significantly reduce approval chances
- Age and loan term: The bond must typically be fully repaid by retirement age (65–70)
The Importance of Deposit Size
While 100% bonds are possible for qualifying applicants, a deposit of at least 10% of the purchase price dramatically improves your application. It reduces the bank's risk exposure, can lower your interest rate by 0.25–0.5%, and demonstrates financial discipline. A 20% deposit is ideal. If you do not have a deposit available, consider waiting and saving before applying — the long-term saving on interest costs makes it well worthwhile.
Using a Bond Originator
One of the most effective steps you can take is to use a bond originator such as ooba or BetterBond. These services submit your application simultaneously to all major South African banks — Standard Bank, ABSA, FNB, Nedbank, SA Home Loans, and others. This increases your chances of approval and creates competition for your business, often resulting in a better interest rate. The service is entirely free to you — the banks pay the originator's commission.
Even if you already bank with one institution, applying through an originator typically results in a more competitive offer than going direct. Always compare before accepting any bond offer.
Frequently Asked Questions
South African banks typically cap total debt repayments at 30% of gross monthly income as a starting point, but the actual assessment considers net disposable income, credit score, employment stability, existing debts, and all monthly expenses under the NCA.
Most banks prefer 10–20% of the purchase price. A larger deposit reduces your bond amount, improves approval chances, and often results in a better interest rate. 100% bonds are available for qualifying applicants.
The NCA requires lenders to conduct a thorough affordability assessment and verify you can realistically afford repayments without financial hardship, taking all existing obligations into account.
Yes. Bond originators submit your application to multiple banks simultaneously, increasing approval chances and securing competitive rates. The service is free to you — banks pay the originator.
Most banks prefer a credit score of 620 or higher. A score of 680+ significantly improves approval chances and the interest rate offered. Check your score for free on ClearScore or TransUnion before applying.