How to get a 100% home loan – zero deposit!

Article summary

• Home buyers who lack the funds for a deposit have another option available to them: the 100% home loan, in other words, a home loan with no deposit required.
• Banks in South Africa are currently approving more 100% home loans, in an attempt to boost the property market.
• Although putting down a deposit has many benefits, the 100% home loan presents first-time home buyers, who may have limited resources, with a viable way into the property market. 

While there are many benefits to putting down a deposit on your home, the 100% home loan provides an option for those who have difficulty mustering the funds for an upfront payment. 

Although anyone can benefit from it, it’s specifically geared toward the needs of first-time home buyers. Banks offer the 100% home loan in order to encourage people to take their first step onto the property ladder.

How do I get a 100% home loan?

You apply for a 100% home loan with the banks. Whether they are likely to approve your application depends on:

• Your credit record.
• Your ability to afford monthly repayments (which will be higher with a 100% home loan).
• The value of the property.

You can check your credit record by prequalifying for a home loan with ooba Home Loans. This process, as well as providing you with an estimation of what you can afford, will determine your chances of being approved for a home loan.

How do I determine the cost of a 100% home loan?

You can use our Bond Repayment Calculator to determine what your monthly repayments will be on a 100% home loan.

For example, if the purchase price of the property is R1 000 000, the bond term is 20 years, the interest rate 8,25%, and the deposit is zero; the monthly repayment will be R8 521 (amounting to a total of R2 045 040 over 20 years).

100% home loan versus deposit

As our Bond Repayment Calculator indicates, a 100% home loan adds up to a lot in the long-term.

So putting down a deposit is always the better option if you’re able. It increases your chances of getting the home loan application approved, and saves you significant costs in the long-term.

Take the above example of a R1 000 000 purchase; with a 10% deposit (R100 000) the monthly repayment would be R7 250, and the total amount payable over 20 years would be R1 740 081. So, that’s R193 343 saved over 20 years.

However, in the short-term, the 100% home loan means you’ll get a home worth R1 000 000 without having to stump up a R100 000 deposit.

Why now is a good time to apply for a 100% home loan

Businesstech.co.za reported in November 2021 that the pace of mortgage loans has accelerated, and is at the highest level since the introduction of the National Credit Act in 2007.

Increased competition between banks has led to higher home loan approval, including 100% home loans. It’s also led to lower interest rates for home buyers.

At ooba Home Loans, 80% of our 100% home loan applications are being approved, with four out of five applicants successfully securing a 100% home loan.

A home loan comparison service: Your best chance of getting a 100% home loan

If you’re a home buyer who is struggling to muster the funds for a deposit, you’re not alone. 60% of applications received by ooba Home Loans are from buyers who have no access to a deposit.

Enlisting the services of a home loan comparison service, such as ooba Home Loans, will give you the best chance of securing a 100% home loan. We submit your home loan application to multiple banks, taking advantage of the competition between the banks to improve your chances of getting your application approved.

We also offer a range of tools that can make the home buying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.