A bond, put to every bank at once.
You sign one offer to purchase. There is no reason to fill in the same application four times and collect four credit enquiries doing it.
- Usual term
- 20 yearsAnything from 5 to 30
- Security
- The propertyWhich is why it is the cheapest money you will borrow
- Deposit
- Often noneA deposit lowers the rate rather than unlocking the loan
- When it is done
- RegisteredAt the deeds office, usually 8 to 12 weeks after
What a home loan actually is
A bond is a loan with your house standing behind it. The bank registers that claim at the deeds office, and because it can take the property if you stop paying, it charges you far less than it would for the same money unsecured. That single fact is why a bond runs at something near prime while a personal loan runs at two or three times it.
It also explains the paperwork. The bank is not only asking whether you can afford the instalment — it is asking what it would be left holding. That is why the offer to purchase comes first and why a valuation happens before anything is granted.
Why one application beats four
Most people apply to their own bank, get one answer, and take it. The ones who shop around usually do it by filling in the same forms again at a second bank, then a third. Every one of those is a credit enquiry against your name, and a run of enquiries in a short window is itself something a credit committee looks at.
Putting one application to several banks together avoids that, and it changes what you are deciding. Instead of accepting or declining one offer, you are comparing four, and the cheapest monthly instalment and the cheapest overall are not always the same bank.
What it costs you
Nothing. The bank pays an origination fee when the bond registers, and that is the whole business model. You are not charged for the application, the comparison or the advice, and nothing is added to your bond to cover it.
The costs that do land on you are the ones that come with buying property at all: transfer duty to SARS where the price is above the threshold, the conveyancer's fees, the bond registration attorney, and the bank's initiation fee. Those are real money and they are payable before you move in.
What you will need
Straight off the application's own checklist. The ticked ones are required; the rest are asked for only where they apply to you.
- ✓The offer to purchaseSigned by both parties. Without it a bank has nothing to value and no date to work to.
- ✓Three months of payslipsSix if your income moves — commission, overtime or a bonus that matters.
- ✓Three months of bank statementsStamped or in the bank's own PDF. Not a screenshot.
- ✓Your IDBoth sides if it is a card.
- ✓Proof of addressAnything under three months old with your name and the address on it.
- +Your marriage certificate and ANCOnly if you are married. In community of property, your spouse applies with you.
Questions
Do I need a deposit?
Not always. Many banks will consider a bond for the full purchase price, particularly for a first-time buyer. What a deposit buys you is a better rate rather than permission — the less of the property the bank is funding, the less it stands to lose, and the pricing follows.
How long does it take?
An answer in principle usually comes back within a few days of a complete application. Registration at the deeds office is the slow part and typically runs eight to twelve weeks from acceptance, most of which is the conveyancers and the deeds office rather than the bank.
Does applying to several banks hurt my credit record?
Applying separately to several banks means a separate credit enquiry each time, and a cluster of enquiries is visible to every bank that looks afterwards. One application put to several lenders avoids repeating that.
Can I get a bond if I am self-employed?
Yes, and it is a large part of what this was built for. The assessment is different: a bank reads your bank statements and your financials rather than a payslip, and the way those are presented changes the answer. There is a longer piece on it here.
What if the bank values the house for less than I am paying?
The bank lends against its own valuation, not the price. If the valuation comes in low you either find the difference in cash, renegotiate, or take the shortfall to another bank — valuations differ, which is another argument for not being in front of only one.