04/09/2026
Important things to know about your Homeloan!
The basics of your Homeloan
A home loan is money that you borrowed from the bank to buy, build or improve a property. The bank registers a mortgage bond over the property in the Deeds Office as security for the loan. The bond remains registered until the full amount owing has been paid and the bond has been formally cancelled at the Deeds Office, you can contact your bank or a conveyancer on the panel for the bank to assist you with the process of the cancellation.
Your monthly instalment usually includes the capital amount borrowed, interest and a monthly service fee. Depending on your agreement, insurance premiums may also be payable. Most home loans have a variable interest rate linked to the prime lending rate, this means that your instalment may increase or decrease when the prime rate changes.
Did you know? Interest is calculated daily on the outstanding balance, interest therefore continues to run until the bank has received full payment and the bond has been cancelled.
You are also responsible for keeping the property in good condition, paying all rates, taxes, levies and municipal charges, and maintaining adequate insurance over the property. If the bank pays any amount on your behalf, it may add that amount to your home loan account and charge interest on it.
Other Important Conditions contained in your Homeloan
1. Homeowners Cover - Insurance for your property
The property must remain insured for its replacement value for as long as the bond is registered. You may usually use your own insurer, provided the policy meets the bankโs requirements. If suitable insurance is not maintained, the bank may arrange insurance and add the premium to your loan account.
2. Life insurance
Credit life insurance is not always compulsory, but it may assist with repayment of the loan if the borrower dies, becomes disabled or is unable to earn an income, depending on the policy terms.
3. Flexi, access or future-use facility
A Flexi, access or future-use facility may allow you to access extra funds or apply for additional lending against the property. These facilities are not guaranteed. The bank may require a new affordability assessment, valuation and approval before funds are made available. The bank may also suspend access to funds if the home loan or another account is in arrears.
Did you know? If you permanently leave South Africa and become a non-resident, exchange-control requirements may apply. Depending on the circumstances and the bank, you may be required to reduce the outstanding home loan balance.
4.Cancelling your Homeloan and the costs involved
A bond is usually cancelled when you sell your property, refinance with another bank or settle the loan in full.
The bank must be notified when you intend to cancel the bond, cancellation figures will then be issued, these figures set out the amount required to settle the home loan and cancel the bond.
It is important to give the bank notice as early as possible. If sufficient notice is not given, the bank may charge a notice-period or early-settlement fee.
The charges may include, but are not limited to:
The outstanding capital balance;
Interest calculated up to the cancellation date;
Monthly service fees and insurance premiums;
Arrears, unpaid instalments and other bank charges;
Any amounts paid by the bank on your behalf;
A notice-period or early-settlement fee, where applicable;
Bond cancellation attorneyโs fees;
Deeds Office, electronic lodgement, F**A and other necessary disbursements; and
Municipal, levy or homeownersโ association clearance costs where the property is being sold.
Did you know? The balance shown on your monthly statement is not always the final amount needed to cancel your bond. Cancellation figures are calculated to a specific date and may need to be updated if there is a delay, as interest continues to accrue daily.
The bank appoints cancellation attorneys to attend to the cancellation of the bond at the Deeds Office. Their fees and necessary disbursements are usually payable by the property owner.
Conclusion
To avoid unnecessary costs and delays, keep your home loan account up to date, give the bank notice early and provide all requested documents promptly. Your conveyancer and the bankโs cancellation attorneys will assist with the process and confirm the final amount payable.
