Discover practical financial strategies to make homeownership attainable in South Africa. From leveraging government grants to comparing home loan rates, learn how to navigate the property market effectively.
Image: File picture.
While 2025 has been marked as a turning point for South Africa’s previously hesitant first-time homebuyers, the financial pressure on those looking to take the plunge cannot be underestimated.
The recent Budget Speech underscored the ongoing challenges facing the country, many of which will impact consumers. However, Gavin Lomberg, CEO of ooba Home Loans, emphasises that a favourable interest rate environment helps ease financial pressure, making homeownership more accessible for aspiring buyers.
Adding to this, Lomberg notes that while saving for a deposit is always the obvious answer, there are various other avenues that homebuyers can leverage to generate further savings in the long-term.
“If planned carefully and correctly, the journey to homeownership can be a rewarding one,” he says. “By taking calculated steps under the guidance of trusted professionals, would-be homeowners can save tens of thousands on their home loan, making homeownership an affordable and attainable goal.”
Pointing to the prevailing trend of building generational wealth, Lomberg adds, “Homeownership goes beyond simply owning ‘four walls’ and a place to live. Today, aspiring homebuyers are leveraging property ownership as a wealth creation strategy for their families and future generations.”
Five Extra Ways to Save
1. Purchase properties under the new transfer duty limit
Effective 1 April 2025, and subject to approval by Parliament of SA’s 2025 Budget, the threshold for exemption from paying transfer duty has been raised by 10% from R1.1 million to R1.21 million, with all subsequent tiers raised by 10%.
“This adjustment is particularly beneficial for first-time homebuyers where the average purchase price currently sits at just slightly over the R1.21 million mark,” says Lomberg, adding that it reduces the upfront costs associated with buying a home and will enable more South Africans to realise their dream of homeownership.
Transfer duties are taxes paid to SARS, starting at 3% of the purchase price, depending on the price bracket.
However, Lomberg emphasises that buyers are still responsible for conveyancing fees, bond registration fees, and Deeds Office fees.
2. Use a home loan comparison service to secure a better interest rate
“Rather than simply approaching your bank for a home loan, it’s strongly advised to shop around for comparative quotes,” says Lomberg. “A home loan comparison service like ooba Home Loans will negotiate with multiple banks on your behalf, ensuring that they compete for your business. In a competitive lending environment, this can translate into significant monthly savings.”
As an example, Lomberg notes that ooba Home Loans’ average interest rate for customers is currently prime minus 0.55%. “If you were to accept a home loan of R 1 million at the current prime lending rate of 11%, you would pay R10,332 per month, versus R9,950 with an interest rate of prime minus 0.55%. Additionally, homebuyers can choose to pay the higher amount each month to pay off their home loan sooner.”
3. Access the First Home Finance government grant
The First Home Finance grant is a subsidy for first-time homebuyers earning between R3,500 and R22,000 per month.
“This government subsidy can either be paid towards a home loan or can be allocated towards a deposit,” explains Lomberg.
To qualify, applicants must be:
· South African citizens living in South Africa.
· Have not received this housing subsidy before.
· Be married, cohabiting, or single with financial dependents.
· Be over the age of 18.
· Have not previously owned a residential property.
The subsidy amount ranges between R30,001 and R130,505, depending on income and affordability.
4. Take advantage of attractive bank discounts and incentives
In a competitive lending environment, South Africa’s major banks continue to attract buyers with special offers, competitive interest rates, and other discounts.
“Each bank’s offering differs, but homebuyers can benefit from incentives such as discounts on bond registration costs and an additional discount in their home loan interest rate when moving their primary banking account to the approving bank,” says Lomberg.
5. Buy-to-let as a path to property investment
For those looking to enter the property market, a buy-to-let strategy can be an effective way to start building generational wealth. “Rather than living in their newly purchased home, the homebuyer rents it out while continuing to rent elsewhere or live with family or friends.”
Known as ‘rentvesting’, this strategy allows buyers to generate rental income to help cover their home loan and related costs. “Over time, homeowners may choose to expand their property portfolio or move into a home once they have greater financial flexibility.”
By leveraging these financial strategies, whether through lower interest rates, government subsidies, or strategic investment choices, homebuyers can make the path to homeownership more affordable and achievable. “With careful planning and the right financial tools, securing a home in 2025 may well be more attainable than you first thought.”
PERSONAL FINANCE