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Mortgages in South Africa

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: May 31, 2022

Getting a mortgage in South Africa

Getting a mortgage in South Africa as a foreigner can make people nervous and we get lots of customers contacting us about how to buy property in this particular country.

There are lots of differences between buying a property in the UK and South Africa, including how much deposit you may need and how to gain permission for a loan.

This can leave many feeling unsure about where to begin and who to turn to for advice. Fortunately, the brokers we work with are experts when it comes to finding a mortgage in South Africa, even if you’ve had bad credit.

To help you get a mortgage in South Africa as a non-resident, we’ve created this guide to answer any questions you have.

Can I get a mortgage in South Africa?

It is possible for non-residents to apply for a mortgage in South Africa although you will need to pass a number of eligibility checks which may differ from lender to lender.

As well as this. the conditions on mortgages are stricter for non-residents of South Africa and you may find that this can delay the process.

You will also need to gain permission to take out a loan by the South African Reserve Bank.

How to get a mortgage in South Africa

Applying for a mortgage in South Africa can be a daunting prospect, especially if you are unfamiliar with their mortgage processes.

First and foremostly, you’ll need a mortgage broker who has negotiated and managed overseas mortgages before, preferably in South Africa and this is where the expert advisors we work with come in.

They can help avoid any delays during the mortgage application but more importantly, they could save you time and money.

An experienced broker will also be helpful later down the line as they can check your contracts and raise any queries regarding unfavourable terms in the mortgage agreement. Make an enquiry to speak to one of them today.

What documents do I need to apply for a South African mortgage as non-resident?

In order to apply for a South African mortgage as a non-resident you will need a number of documents.

These typically include:

You will also need proof of income including:

  • Your last 3 months’ payslips (if employed)
  • Accountant’s reference and your last 2 years’ audited accounts & tax returns (if you’re applying for a mortgage when self-employed)
  • Your last 3 months’ bank statements
  • Your most recent tax certificate and an employer’s reference

Can I afford a mortgage in South Africa?

To establish whether or not you can afford your South African mortgage as a non resident, lenders may look at your:

That being said, South African lenders tend to focus less on your ability to pay your mortgage and more so on your level of debt.

In order to obtain a mortgage in South Africa, any debts you have must be no more than 30% or 33% of your total gross income.

Additionally, a good credit history will also be looked upon favourably as this will demonstrate your ability to handle money well. This is important to lenders as they want to be confident that you will repay your mortgage.

Are there other costs involved when getting a South African mortgage?

Yes, although with any property purchase and mortgage agreement, you will need to set aside some money for fees and other costs.

An advisable figure to put by would be 4–5% of the property’s price which should cover:

  • Banks fees
  • Transfer duty
  • Buildings insurance
  • Conveyancing fees
  • Admin costs
  • Moving costs

If you are unsure about how much you should set aside for any additional costs that may be payable during your mortgage process, talk to an advisor.

How much could I borrow on a mortgage in South Africa?

The amount that you may borrow as an overseas borrower is limited. This is because the typical loan-to-value ratio (LTV) for a mortgage in South Africa is 50% of the lender’s valuation of the property.

So, for example, if you wanted to buy a property in South Africa worth £200,000 and your lender agrees to loan you 50% of the property’s market value, they would give you a mortgage of £100,000.

In order for the lender to establish your loan, you must be able to prove that you have the additional 50% of the property’s value.

Furthermore, the South African Reserve Bank which is the country’s central bank, must approve of any loan to a non-resident before it can be granted.

Can I get a higher LTV as a resident of South Africa?

Potentially yes, if you are granted residency in South Africa you may find that the loan to value (LTV) rates are much higher at 75% of the property’s value.

It’s also useful to know that the South African Reserve Bank deems having a work permit to be equivalent to residency.

What is a South African mortgage bond?

A mortgage bond is a common term used throughout South Africa which refers to a mortgage agreement. You may also hear a mortgage in South Africa referred to as an originator.

Similarly to the UK, South African banks offer a range of mortgage products including:

What are South African mortgage rates like?

Although the cost of property is relatively low in South Africa, interest rates on bonds can be higher compared to the rates you would expect to see in the UK.

You may find that variable rate mortgages are a more common choice in South Africa rather than fixed-rate ones.

This is predominantly because of the unfavourable fixed rates that are offered, especially to non-natives.

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Can I use a UK lender to get a mortgage in South Africa?

Unfortunately, it is not possible to get a mortgage in the UK for property in South Africa.

To get a mortgage for a South African property, you have to use a registered South African bank.

However, there is a way around this for some. If you already own a property in the UK and have existing equity, it could be possible to refinance the home with a UK lender.

The funds from this could then be used in South Africa to buy a property.

Remortgaging a UK property to buy South African property

Remortgaging to release equity on one property to fund the purchase of another is always risky, even if you own a large percentage of the equity in the initial property.

This is because you will essentially be taking out an additional loan with new agreements and possibly a new rate of interest.

Before any loan is taken out, you need to ensure that you can afford to repay your mortgage on your first property as well as pay for the second property and then any bills or maintenance that come with either.

Here, you’ll find the answers to some of the questions we hear most often about getting a non-resident mortgage in South Africa.

Getting advice about South African mortgages for foreigners

There are lots of resources for expats who are thinking about getting a mortgage bond for a South African house and while these can provide useful advice, speaking to a real professional can be more time and cost efficient.

With so much misinformation and confusion regarding overseas mortgages for expats, real market knowledge about South African mortgages can be invaluable.

How to find expert South African mortgage brokers

If you have questions about getting a mortgage in South Africa as a foreigner and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.


Is remortgaging in South Africa possible?

Remortgage products are available with some lenders in South Africa but your ability to refinance your property will depend on your own financial circumstances.

Some South African homeowners have had a change in their finances and so they want to remortgage to find a better deal.

If you are considering remortgaging in South Africa, work with a broker who can source the best mortgage rates and terms for you either with your existing lender or another mortgage provider.

Can I get a reverse mortgage in South Africa?

Many people lack savings and consider releasing equity from their home to fund their retirement or home improvements.

However, because the property market in South Africa is more challenging, there are fewer remortgaging products and often higher interest rates on loans.

This can mean that interest payments accumulate quickly and eat up any equity in the property.

Therefore, a reverse mortgage in South Africa is not to be taken lightly and you should seek professional advice before proceeding to ensure that it is the right option for you.

What is the maximum term of a mortgage bond in South Africa?

Typically, you can expect the term of an international mortgage in South Africa to span between 20 and 25 years, although some lenders have a maximum repayment duration of 30 years.

Most South African mortgage agreements state that the borrower must have paid off their mortgage by the time they are 70.

Should I use a South African mortgage calculator?

Online mortgage calculators provide a quick snapshot of what you can expect to pay for your South African mortgage. However, they don’t necessarily present the whole picture. Every lender has their own unique way of calculating affordability so an online calculator is only an indication of what you can borrow, or what you will pay.

A typical mortgage calculator wont take all of your details into consideration – details that lenders will consider when assessing your affordability.

This can result in inaccurate quotes and misinformation, leaving many potential homeowners feeling disheartened or unsure about whether they’ll be approved or not.

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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