FAQ's

Everything You Need To Know About Home Loans

Frequently Asked Questions

Your monthly home loan repayment normally consists of:

  • Basic instalment, which includes capital and interest.
  • Homeowner’s insurance premium.

Homeowners insurance is compulsory, and it is a condition of the home loan to have insurance cover on all freehold properties at full replacement value. You must protect your home against natural disasters, such as fire, flood damage, etc. You may insure your home with Nedbank or choose your own insurance provider. For sectional title properties, this insurance is included in your monthly levy.

  • Credit life insurance (if applicable)

Credit life insurance is optional, and you may take out insurance so that your home will be secured should anything happen to you. The policy terms and conditions will indicate the events and circumstances in respect of which you will be covered.

  • Monthly service fee

You’ll pay a service fee for the costs of maintaining your home loan account. This fee will be included in your monthly home loan instalment. 

Interest is charged once the first progress draw has been paid out, and is calculated only on the amount that the bank has already paid out.

Interest becomes payable once your first progress payment has been made.  This ensures that accrued interest does not eat into the capital amount that has not yet been paid out by the bank.

Progress payments refer to the progressive draws in which the building loan is paid out. These draws are paid out in stages as the building progresses. The bank will advance the builder a series of payments on the condition that the bank is satisfied with the percentage of building work completed.  The builder normally requests three to four progress payments before the completion of your home.

Buying fixed property (e.g. a home) is complex and involves the exchange of a large sum of money, the law requires an attorney or conveyancer to attend to the transfer of the property. The attorney fees for transferring property in South Africa are charged within the conveyancing fee guidelines prescribed by the Law Society of South Africa.

If finance is required to purchase a property, the bank appoints the registration attorney to have a mortgage bond registered against the property, as security for the loan, at the deeds office. 

The transferring attorney is usually appointed by the seller and it is the buyer’s responsibility to pay for the transfer fees (this is usually specified in the offer to purchase or sale agreement). The transferring attorney prepares the necessary transfer documents. Both attorneys will complete the relevant processes and documents required for the conveyancing process and will correspond with the bank, buyer, seller and the deeds office.

The transaction can take between two and three months depending on the conveyancing process, the deeds office, and any complications or delays.