Find out more about bond affordability
What is a bond affordability calculator?
When planning on buying a home, it is essential to know exactly how much you can afford before you start your property search. A bond affordability calculator uses your monthly income to determine the maximum home loan amount that you could get from a bank.
How do banks calculate my bond affordability?
Banks usually calculate the home loan amount you qualify for by looking at:
- Gross Income: This is your total income before deductions like tax, medical aid and pension.
- Net Income: The is your income after all deductions
- Total Expenses: These are all your monthly expenses like car repayments, internet costs, satellite TV costs
- Interest Rate: This is usually set by default to the prime lending rate. Depending on the bank’s lending criteria you may qualify for a higher of lower rate.
- Number of years: Most home loans in South Africa are over 20 years but you may choose a longer or shorter term.
Your affordability is ultimately based on around 30% of your gross monthly income and on your disposable income.
Remember that a bond affordability calculator is a useful tool to determine the maximum loan value and monthly repayment that you qualify for but is not a guarantee that you will be granted a home loan. You will need to apply for a home loan and it is at the discretion of the bank to grant it or not.