When should you start saving for your first property?
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Saving up a deposit for your first property brings great financial rewards.
Over the last couple of years, the banks’ lending criteria have become increasingly stringent, and in particular, deposit requirements have remained high. Some banks have adopted policies of only awarding bonds at a 70% loan to value. That means a deposit of R300 000 required on the purchase of a R1m property, a steep requirement for most prospective homeowners. More recently banks have changed these policies and have become more competitive.
However, the difficulty in obtaining a 100% bond is not the only reason why it is imperative to save up a deposit for a property purchase. Even if you do obtain a 100% bond, you will still need additional funds to cover the many other costs related to buying a property, such as the transfer duties and numerous fees that add up to significant amounts.