100% Home Loans in South Africa

A 100% home loan is a mortgage option that allows you to finance the entire purchase price of a property without needing a deposit. This type of loan is especially beneficial for first-time buyers and those who may not have enough savings for a deposit but have a steady income to afford monthly repayments.

What Is a 100% Home Loan?

A 100% home loan is a financing option where the bank covers 100% of the property’s purchase price, meaning you don’t need to pay an upfront deposit. This type of loan is typically offered to borrowers with good credit scores, stable income, and a strong affordability profile.

While you won’t need a deposit, keep in mind that other costs—such as transfer fees, bond registration costs, and attorney fees—may still need to be covered out of pocket unless the lender provides a no-deposit home loan with costs included.

Benefits of 100% Home Loans

No Deposit Required
- Makes it easier for buyers to enter the property market without having to save for years to accumulate a deposit.
Ideal for First-Time Buyers
- Especially useful for young professionals and families with a steady income but no significant savings.
Access to the Property Market Sooner
- You can purchase a home sooner without waiting to save for a deposit.
Opportunity for Investment
- Allows investors to enter the real estate market with minimal upfront capital.

Drawbacks of 100% Home Loans

Higher Monthly Repayments
- Since you’re borrowing the full amount, your monthly installments will be higher compared to a loan with a deposit.
Interest Costs Over Time
- Without a deposit to reduce the loan amount, you’ll pay more in interest over the life of the loan.
Stricter Approval Criteria
- Banks are cautious about offering 100% loans, meaning you’ll need a strong credit score and financial stability to qualify.
No Equity from Day One
- With no deposit, you start with zero equity in the property, leaving you more vulnerable to fluctuations in property value.

Who Qualifies for a 100% Home Loan?

While 100% home loans are accessible, they are typically offered to buyers who meet certain requirements:

Good Credit Score
- A credit score of 600 or higher significantly increases your chances of approval.
Stable Income
- Proof of steady employment or consistent income is essential.
- Self-employed applicants may need to provide additional documentation, such as tax returns and financial statements.
First-Time Buyers
- Many banks favor first-time buyers, especially if you are purchasing a property in an affordable price range.
Affordability
- The bank will assess your debt-to-income ratio, ensuring your total monthly debt repayments (including the new home loan) don’t exceed a reasonable percentage of your income, often around 30%-35%.
Government Assistance
- If you fall within the affordable housing bracket, you may qualify for additional help through programs like FLISP (Finance Linked Individual Subsidy Program).

A Guide to Home Loans in South Africa

Top Banks Offering 100% Home Loans in South Africa

1. Standard Bank

Offers 100% home loans for first-time buyers.
Flexible repayment terms of up to 30 years.
Access to FLISP subsidy for qualifying buyers.

2. Absa Bank

Provides 100% home loans with competitive interest rates.
Dedicated first-time buyer programs with tools to assist in affordability calculations.

3. FNB (First National Bank)

Offers 100% home loans with a strong focus on first-time buyers.
Includes helpful tools to calculate affordability and bond repayments.

4. Nedbank

Specializes in 100% loans for affordable housing and first-time buyers.
Provides tailored solutions for government employees and young professionals.

5. SA Home Loans

Offers 100% home loans with flexible repayment options.
Simplified application process for salaried individuals.

How to Apply for a 100% Home Loan

Check Your Credit Score
- Obtain your credit report through platforms like TransUnion, Experian, or ClearScore.
Calculate Your Affordability
- Use an online bond affordability calculator to determine how much you can borrow based on your income and expenses.
Prepare Documentation
- South African ID or passport.
- Proof of income (recent payslips or tax returns).
- Bank statements (usually for the past 3–6 months).
- Proof of residence (e.g., utility bill).
Submit Your Application
- Apply directly through a bank’s online platform, in-person branch, or via a home loan consultant.
Negotiate the Interest Rate
- A strong credit score or stable employment history may qualify you for a lower interest rate.
Approval and Property Transfer
- Once approved, the bank will issue a bond grant, and the property transfer process begins through an attorney.

Costs Associated with 100% Home Loans

Even with no deposit required, there are additional costs to consider:

Bond Registration Fees: Paid to the attorney registering the bond.
Transfer Duty: If applicable (not required for properties under R1 million).
Attorney Fees: For transferring ownership of the property.
Homeowners Insurance: Required by lenders to protect the property.

A Guide to Loans in South Africa: What You Need to Know

100% Home Loans vs. Loans with a Deposit

Feature	100% Home Loan	Loan with Deposit
Upfront Payment	No deposit needed	Requires deposit (typically 10-20%).
Monthly Repayments	Higher repayments	Lower repayments.
Interest Paid	Higher overall interest costs	Less interest due to lower principal amount.
Approval Criteria	Stricter requirements	Easier to qualify if a deposit is provided.
Equity	Starts with no equity	Immediate equity from the deposit.

Is a 100% Home Loan Right for You?

A 100% home loan is ideal if:

You don’t have enough savings for a deposit but can afford monthly repayments.
You’re a first-time buyer or fall within an affordable housing bracket.
You want to enter the property market without delays.

However, if you have some savings, a partial deposit can reduce your overall costs and monthly payments, making a traditional home loan a more affordable long-term option.

Conclusion

100% home loans are a great opportunity for South Africans looking to purchase property without a deposit, particularly for first-time buyers. While they come with higher monthly repayments and stricter approval criteria, they can be the key to homeownership for those who have a stable income but lack upfront savings.