How much you will pay on a R500,000 and R1 million home loan in South Africa right now

The South African Reserve Bank’s (SARB’s) decision to keep rates unchanged at the end of March is set to benefit South African homeowners for the rest of 2021.

With the repo rate at 3.5% and home loan base rate at 7%, realty experts have said that South Africa is now firmly a buyer’s market.

Data from FNB’s home loan calculator shows that the gross monthly household income required to qualify for a R500,000 home loan has dropped to R12,921.65.

At the same time, the monthly repayments on home loans have become more affordable, falling from R4,100 a year ago to R3,945.49 on a 20-year bond with no deposit.

By comparison, the gross monthly household income required to qualify for a R1 million home loan has dropped to R25,843.30. The monthly repayments on a R1 million home loan is now around R7,821.99 on a 20-year bond with no deposit.

Bond amount Monthly repayment on 20-year bond (no deposit)
R500 000 R3 945
R750 000 R5 884
R1 000 000 R7 822
R1 500 000 R11 698
R2 000 000 R15 575

“Buy-to-let purchasing has fallen off in the past year in response to the Covid19-induced problems with defaulting tenants, rising vacancies and very low rental increases, but for investors with a medium- to long-term outlook, now is actually the very best time to buy carefully selected rental properties,” said says Gerhard Kotzé, managing director of the RealNet estate agency group.

“Interest rates are really low and prices are very negotiable, so astute investors are currently finding excellent opportunities to acquire properties where the rental income will cover their costs for now, and they can expect both rental and capital growth in the future.”

He added that interest rates are currently still at a 40-year low, following the drastic cuts made last year to try to stimulate economic growth in the face of the Covid-19 pandemic.

“These decreases reduced the minimum monthly repayment on a 20-year home loan of R750,000, for example, by almost 20%, and of course also reduced the gross income required for the borrower to qualify for the loan.

“From an investment point of view, the low rates also mean that the monthly bond repayment due on your investment property will be much lower and may well be completely covered by the rent your tenant is paying, especially if you have acquired the property at a competitive price.”


Home loan data is for comparison purposes only.

Read: How municipalities make money from property owners in South Africa

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How much you will pay on a R500,000 and R1 million home loan in South Africa right now