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Borrowing

How home loans and bonds work

A home loan is repaid over a long term. The bond is the security registered over the property. The bank's yes is not this page's yes.

Reviewed 29 October 2026 by the WiT Money editorial team. This is general information, not a recommendation from a named adviser.

Key points

  • The deposit, the rate and the term drive the instalment. Transfer costs are extra cash.
  • A variable rate can move. A fixed rate is only fixed for the period the agreement states.
  • An affordability illustration is not a pre-approval.

You borrow to buy a home, or to refinance one, and the loan is secured by a mortgage bond registered in the deeds office. Until the bond is cancelled, the property stands as security. People say 'bond' for both the loan and the mortgage. The instalment is what you pay. The bond is why the lender can enforce against the property if you do not.

Banks look at your income, your expenses, your other debts and the property. Two households with the same salary can be offered different amounts. A page that turns 30% of gross income into a bond amount is an illustration. It is not the bank's credit decision.

The cash you need besides the deposit

The deposit reduces the loan. Transfer duty, on a sale that is not subject to VAT, is a separate tax. Conveyancing and bond registration are professional fees and statutory charges. This site calculates transfer duty from the SARS table and asks you to type the legal costs you were quoted. It does not invent an attorney tariff.

Fixed and variable rates

A variable home-loan rate is usually a margin over the bank's prime rate, and prime moves when the repo rate moves. Your instalment moves with it. A fixed rate holds the rate for an agreed period and can cost more at the start. Neither choice is free of risk. Read the period and the penalty for breaking a fixed rate.

Extra payments

Paying more than the contractual instalment can cut interest and shorten the term, if the bank applies the extra amount to the capital. Some agreements apply it differently. The extra-repayment calculator shows the arithmetic. It does not read your bond document.

Questions readers ask

Does a pre-qualification guarantee the bond?

No. The property, the valuation and the final assessment still sit with the lender.

Related

Sources

Page updated 29 October 2026. A source date is the day WiT Money checked that page, not a promise the institution has not changed it since.