We look at some of the most important things to keep in mind if you're thinking of buying your first home.

In this article

• Make sure you're in the best financial shape you can be

• Know the upfront costs

• You don't have to do it alone

• Choosing the right home loan

• Enlist the help of a bond originator

• Draw up a budget once your bond has been approved

We know that taking out a home loan can be unnerving. But there is no need to panic, especially if you do your research and plan properly. We have put together six important tips to help ease the stress of buying your first home.

1. Make sure you're in the best financial shape you can be

Before you start looking for a house, make sure that you're in a good financial position to make a big purchase. You can do this by reducing your monthly expenses, improving your credit score, and being strategic about the number and timing of your credit applications.

Reduce your monthly expenses

Credit providers conduct affordability assessments to determine the size of the loan they're willing to approve. They take a close look at your income and monthly expenses, so it's important to show that you are not spending way more than you earn. You can start by cancelling services or subscriptions that you're not using anymore. It's also worth checking if you're getting the best deal on your utilities, broadband and car insurance - if you aren't, now may be the time to switch.

Improve your credit score

It's never too early to work on your credit score, even if you're not thinking of getting a home loan right away. A good credit score (Looking bright, 634-657, or higher) is likely to increase your chances of getting a good deal on a home loan. ClearScore gives you access to your credit report for free. Make sure to check it for errors and don't delay fixing problems that may affect your credit score and report.

Check your credit score for free on ClearScore.

Avoid multiple credit applications

It's a good idea to avoid multiple credit applications right before you take out a home loan, because it may negatively impact your credit score. A lower credit score will in turn impact your home loan application.

If you absolutely need to take out credit before you apply for your home loan, you can check your eligibility by getting pre-approved. This is a better option as it doesn't affect your credit score.

2. Know the upfront costs

How your deposit size affects your monthly repayments

The size of your home loan deposit in South Africa has a direct impact on your monthly repayments, the interest rate you are offered, and the total cost of your bond over its lifetime. The table below illustinterest rates the difference on a R1.5 million property using a 20-year repayment term.

Example: monthly repayments on a R1.5 million home at different deposit levels

Figures are illustrative estimates based on typical market interest rates and may vary by lender. Each scenario assumes 240 monthly instalments over a 20-year term, giving a total of all instalments of R4 050 000 with no deposit, R3 531 600 with a 10% deposit and R3 038 400 with a 20% deposit. These totals exclude initiation fees, monthly service fees and any compulsory insurance, so they are not complete repayment estimates.

Why a larger deposit can lower your interest rate

Banks view a larger deposit as a sign of lower risk. When you put down 20% or more, the lender finances a smaller portion of the property's value, which reduces its exposure if property prices fall. In return, many banks reward this lower risk with a more competitive interest rate - sometimes as much as 0.5 to 1 percentage point below what a zero-deposit applicant would receive. Over a 20-year term, even a small rate reduction can save you hundreds of thousands of rands in total interest.

Is a 100% home loan (zero deposit) still possible?

Yes, some South African banks still offer 100% home loans, but approval is not guaranteed. Lenders typically reserve zero-deposit bonds for applicants with strong credit scores, stable employment, and a clean repayment history. Keep in mind that a 100% bond means higher monthly repayments and significantly more interest paid over the life of the loan. If you are unable to save a deposit right now, focus on strengthening your credit profile to improve your chances - you can check your credit score for free on ClearScore to see where you stand.

Along with paying a deposit, you'll need to save for other upfront costs associated with buying a property. You can take out a home loan with a deposit of just 10% of the cost of the property. However, a larger deposit may get you a better deal.

You may also have to pay all or at least some of these costs:

• Transfer Duty for properties over R1,210,000

• Bond registration costs

• Loan initiation costs

• Transfer fees

Some lenders may waive certain fees, so it's worth shopping around to understand what options are available.

3. You don't have to do it alone

State subsidies

The government has schemes available to help first-time buyers. f you are a South African citizen earning between R3 501 and R22 000 per month, you may be eligible to apply for FLISP (Finance linked individual subsidy programme).

Joint applications

A joint application can increase your chances of qualifying for a home loan. When deciding whether or not to approve a loan, banks will consider the income and expenses of both applicants during their affordability assessment.

You should make sure that both applicants have a good credit score so that you can benefit from a good interest rate. In a joint bond application, each person is liable for half of the bond and legal fees. You need to remember that if you default on a payment, it will affect your credit score and report as well as your partner's.

Should one person decide to pull out of the bond agreement, a new bond application will have to be processed after another affordability assessment. The existing home loan will be closed and a new one will have to be registered - this means you will have to pay the bond registration fee for a second time.

4. Choosing the right home loan

How the home loan application process works - step by step

Understanding the home loan application process in South Africa removes much of the uncertainty first-time buyers feel. From pre-approval to collecting the keys, here are the steps to buying a house in South Africa with a bond.

Step 1: Get pre-approved to know your budget

Before you start viewing properties, apply for pre-approval from one or more banks. Pre-approval gives you a realistic idea of how much you can borrow and signals to estate agents and sellers that you are a serious buyer. The process usually involves a basic affordability check and a credit assessment, and it does not affect your credit score the way a formal application does.

Step 2: Find a property and sign the Offer to Purchase

Once you have found a home within your pre-approved budget, you and the seller sign an Offer to Purchase (OTP). This document is legally binding once both parties have signed, so make sure you understand all the conditions - including any clauses that allow you to withdraw if your bond is not approved within a certain timeframe.

Step 3: Submit your formal home loan application

With the signed OTP in hand, submit your formal application to the bank - or to multiple banks if you are using a bond originator to shop around on your behalf. You will need to provide all the required supporting documents, including proof of identity, income, and bank statements.

Step 4: Property valuation by the bank

The bank sends a qualified valuer to inspect the property and confirm that its market value supports the loan amount you have requested. If the valuation comes in lower than the purchase price, the bank may approve a smaller loan, and you would need to cover the shortfall yourself or renegotiate the price with the seller.

Step 5: Loan approval and acceptance

If the bank is satisfied with your affordability, credit profile, and the property valuation, it issues a formal loan approval - also called a bond grant. Review the terms carefully, including the interest rate, repayment period, and any conditions. You then sign the loan agreement to accept the offer.

Step 6: Bond registration at the Deeds Office

A bond attorney appointed by the bank handles the registration of the bond at the Deeds Office. At the same time, a transfer attorney manages the transfer of the property into your name. Both processes must be completed before you officially become the owner and can move in.

How long does the process take?

From the moment you submit your formal application, bond approval typically takes between seven and twenty-one working days, depending on the bank and the complexity of your application. The full process - from OTP to registration and key handover - usually takes between eight and twelve weeks. Delays can occur if documents are incomplete or if there are issues with the property valuation, so staying organised from the start helps keep things on track.

You generally have two options when it comes to choosing the type of home loan you want.

Option 1: Variable interest rate home loan

A variable interest home loan is linked to the prime lending rate. It changes whenever the prime lending rate increases or decreases. A variable interest rate is the less risky option for lenders, which is why they can offer applicants a more competitive rate. If the prime rate rises, your interest rate and monthly repayments may increase, and you could pay more overall.

Option 2: Fixed interest rate home loan

A fixed interest rate means you commit to a single interest rate for a set period. This means the interest rate that the bank quotes you at the onset is what you will pay regardless of changes in the prime lending rate. Banks usually offer a fixed rate for short periods. At the end of that period, you either revert to a variable rate or have to negotiate a new fixed rate offer with your bank.

5. Enlist the help of a bond originator

Documents you need to apply for a home loan in South Africa

Having your paperwork in order before you begin the application process can save weeks of back-and-forth with your lender or bond originator. South African banks require a standard set of documents to verify your identity, income, and the property you intend to purchase. Below is a checklist of the documents needed for a home loan application in SA.

Proof of identity

You will need a certified copy of your South African ID book or smart ID card. Foreign nationals must provide a valid passport together with a work or residency permit. Most lenders require the certified copy to be no older than three months.

Proof of income - salaried vs self-employed applicants

Salaried applicants should supply their latest three payslips and a letter of employment confirming their position, salary, and length of service. If you are self-employed or earn commission-based income, banks typically ask for your latest two years of financial statements, tax returns (ITR12), and a letter from your accountant confirming your income. Some lenders also require a SARS tax clearance certificate.

Three to six months of bank statements

Lenders use your bank statements to verify your income deposits, assess your spending habits, and check for existing debit orders. Expect to provide at least three months of statements, though some banks request up to six months. Make sure there are no unexplained large transactions that could raise concerns during the affordability assessment.

Proof of residence

A recent utility bill, municipal account, or bank statement showing your current residential address is usually sufficient. The document should be dated within the last three months.

Signed Offer to Purchase (OTP)

Once you have found a property and agreed on a price with the seller, both parties sign an Offer to Purchase. This legally binding document is submitted alongside your home loan application and includes the agreed purchase price, any conditions, and the transfer timeline.

Additional documents for joint applications

If you are applying for a joint home loan, both applicants must provide their own full set of documents - ID, proof of income, bank statements, and proof of residence. The bank will run a separate affordability assessment and credit check on each applicant before making a decision.

A bond originator is the middleman between the home loan applicant and credit providers. A bond originator can help make things a little easier by assisting with your paperwork and submitting the application on your behalf to get a good deal.

6. Draw up a budget once your bond has been approved

Frequently asked questions about first-time home loans in South Africa

What is the minimum salary to qualify for a home loan in South Africa?

There is no single minimum salary set across all banks, but as a general guideline most lenders require that your total monthly bond repayment - including insurance and fees - does not exceed roughly 30% of your gross monthly income. For a modest property of around R500 000 with no deposit, this typically means you would need a gross salary of at least R20 000 to R25 000 per month. Applicants earning less may still qualify for government assistance through the FLISP subsidy programme if they earn between R3 501 and R22 000 per month.

Can I get a home loan with a bad credit score?

It is significantly harder to get approved for a home loan with a lower credit score (Let's start climbing, 0-598), but it is not always impossible. Some lenders may consider applicants with lower scores if they can demonstrate stable income, a reasonable deposit, and a clear explanation for past defaults. However, you are likely to face a higher interest rate, which increases the total cost of your bond. A better strategy is to work on improving your credit score before you apply - paying off outstanding debts, correcting errors on your credit report, and avoiding new credit applications can all make a meaningful difference within six to twelve months.

How much can I borrow for a home loan based on my salary?

A common rule of thumb is that banks will lend you roughly three to five times your gross annual salary, although the exact figure depends on your expenses, existing debts, credit score, and the interest rate at the time. For example, if you earn R30 000 per month (R360 000 per year), you might qualify for a bond of between R1 080 000 and R1 800 000. To get a more accurate number, consider applying for pre-approval - this gives you a realistic borrowing limit without affecting your credit score.

What is the current prime lending rate in South Africa?

The prime lending rate is the baseline interest rate that South African banks use to price home loans. It is set by the South African Reserve Bank and adjusts whenever the repo rate changes. Because the rate fluctuates, it is best to check the latest figure on the Reserve Bank's website or your bank's home loan page before you apply. Your final interest rate will be quoted as prime plus or minus a margin based on your individual risk profile.

Are there age requirements for applying for a home loan?

You must be at least 18 years old to enter into a legal contract in South Africa, which includes signing a bond agreement. There is no official upper age limit, but banks do take your age into account when assessing affordability. If you are close to retirement age, the lender may offer a shorter repayment term to ensure the loan is settled before your income drops. Younger applicants with limited credit history can strengthen their applications by building a positive track record - even a small credit account repaid consistently helps demonstrate financial responsibility.

Once your home loan is approved, draw up a budget so that you can keep up with your repayments. You do not want to drop the ball on your other monthly expenses such as municipal bills, groceries and day-to-day costs. It's important to stick to your budget. If you fall deep into debt, your house may be repossessed - and you don't want that to happen.

Defaulting on your bond will also negatively affect your credit score and report, which will damage your chances of borrowing money again. It's also a good idea to set aside roughly 1% of your home's purchase price every year to pay for maintenance and repairs that might unexpectedly come up.