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Buying in South Africa, what do I need to know?
We can arrange mortgages for South Africans living in South Africa or overseas, as well as non-South Africans looking to move to SA or simply looking to buy an investment or holiday property.
In South Africa the interest rate is not set, but in fact only determined after your application is submitted to the bank and based on a number of factors such as your income, level of expenditure and the postal code and style of the property.
Our SA mortgage system is integrated with all the South African banks, allowing us to simultaneously submit online mortgage applications to all the banks. The bank that is prepared to offer the best deal, ‘wins’ your business.
What type of property can I get a mortgage on?
We can arrange mortgages for individuals or companies to buy main homes; second homes; rental or investment properties; off-plan properties, land and commercial properties.
Equity release mortgages are available.
What currency will my mortgage be in?
All South African banks will provide mortgages in Rands, but we can also arrange offshore mortgages in other currencies such as US Dollars, Pound Sterling, Euros and Swiss Francs.
What is the maximum loan amount (LTV%)?
South Africans – 108% of the purchase price
Non-South Africans – 70% of the purchase price.
What is the minimum loan amount?
The minimum loan amount that Somerset Mortgages will consider is R400,000.
How long is the term of the mortgage?
Mortgages must be fully repaid by the age of 80, with a minimum term of 2 years and a maximum term of 30 years.
How much will the bank charge me?
The charges vary from bank to bank and also depend on the amount of the mortgage. We will supply you with a breakdown of the charges applicable to your mortgage application and where possible negotiate reductions.
Do I need life assurance?
No. Life assurance is not mandatory, but is always recommended.
Which mortgage types are available?
Both capital repayment and interest only mortgages are available for both purchase and equity release.
How long will it take for my mortgage to be arranged?
With a South African bank we can negotiate an offer within 48 hours. With offshore banks it can take a little longer.
Interest rates
Rand Mortgages:
South Africa’s Prime Lending Rate is currently 14.5%. We will negotiate a discount off this rate on your behalf. The amount of the discount will depend upon the Loan to Value ratio, the size of the mortgage, the location of the property and your repayment to income ratio.
Usually we can arrange a discount of 2%
Alternative Currencies…
We can also arrange mortgages in US$ Dollars, Pounds Sterling, Euros and Swiss Francs. These will offer lower interest rates than a South African Rand mortgage.
A Swiss Franc mortgage will have an interest rate of approimately 5%.
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When buying property overseas, we recommend that you seek professional tax and legal advice.
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