Bond affordability: What you need to earn to qualify for a bond

Article summary:

• As a rule of thumb, you should set aside no more than 30% of your salary for bond repayments.
• With the prime rate now at 10.25% (November 2025), affordability has improved dramatically.
• Use our Bond Calculator to determine exact repayment amounts at current rates.
• Government programs like First Home Finance support low-income first-time buyers.

There is a range of tools that can help you determine your bond affordability, such as the ooba Home Loans Bond Affordability Calculator. What proportion of your salary should you be spending on the monthly repayments for that home loan? This number must take into account monthly living expenses, income, and the current interest rates.

Note: Before continuing, be aware that our Bond Affordability Calculator can help you determine what you’ll pay on a bond, along with your monthly repayment amount. This will make it easier to determine your budget relative to your salary. Although the calculator does not provide 100% accuracy, it provides a useful guideline that enables you to budget more effectively.

The 30% rule: your starting point

As a rule of thumb, you should set aside no more than 30% of your gross income for home loan repayments. This rule acts as a safe number because it leaves room for living expenses. It’s a realistic amount to set aside for a home loan. Going too far above this is risky.

Research from Lightstone property showed the minimum salary for buying a home to be around R22,600 (assuming a 20-year repayment term). However, with the dramatic interest rate cuts we’ve seen, this figure has effectively decreased, making homeownership more accessible than ever.

How Interest Rates impact your affordability

A lower interest rate means you’ll be able to spend a slightly lower percentage of your salary on bond repayments for the same property value.

You should still keep the 30% rate in mind when searching for a property you can afford, but the interest rate obviously plays a crucial role in your decision-making.

As of November 20, 2025, the prime lending rate is 10.25% – the lowest it’s been since the COVID-19 pandemic. This represents a remarkable improvement from the previous highs of 11.75% in 2024, and is significantly below the historical average of 13%-15.5%.

What this means for your budget

The recent rate cuts have dramatically improved affordability:

• Monthly savings: Each 0.25% rate cut could save approximately R83 per month on a R550,000 home loan.
• Total impact: The 1.50% reduction since September 2024 potentially saves around R500 monthly.
• Annual savings: That’s nearly R5,000 per year in reduced repayments.

Factors that can adjust the 30% rule

Joint bond applications

If you’re applying for a joint bond with a spouse, the percentage of your salary devoted to home loan repayments can be a little higher, as you’ll both presumably be pooling your resources to cover living expenses.

Location considerations

Lightstone’s estimated minimum salary doesn’t take into account the location of the property. In truth, your required monthly income for safely paying off a loan will depend on average house prices in that region. Here’s updated data based on current market conditions:

• Eastern Cape: Average property price = R1,000,000 – R1,100,000. Average required salary = R32,000 – R35,000 per month (down from previous estimates due to lower rates).
• Western Cape: Average property price = R1,8 – R1,9 million. Average required salary = R55,000 – R60,000 per month.
• KwaZulu-Natal: Average property price = R1,2 – R1,3 million. Average required salary = R45,000 – R48,000 per month.
• Gauteng: Average property price = R1,5 – R1,6 million. Average required salary = R50,000 – R54,000 per month.

Note: These figures reflect improved affordability due to the current 10.25% prime rate

Government support for low-income earners

Don’t lose hope if your salary falls below these thresholds. The government program First Home Finance (formerly FLISP) is aimed at low-income first-time buyers, specifically those who earn R3,501 to R22,000 per month.

The programme provides a subsidy ranging from R38,878 to R169,264, which you can put toward your bond. This improves your chances of home loan qualification and effectively subsidises your monthly earnings. With current low interest rates, these subsidies stretch even further.

Full First Home Finance qualification criteria:

• Your income must range from R3,501 to R22,000 per month.
• You must be a South African citizen with permanent residency in South Africa.
• You must not have received a government housing subsidy before.
• You must be married or cohabiting OR single with financial dependents.
• You must be over 18 years old.
• You must not have owned fixed residential property before.

Practical bond affordability examples

Here are some common bond amounts and what you’d need to earn to afford them, assuming a 20-year bond and the current interest rate of 10.25%:

• R500,000 bond: Monthly repayment ≈ R4,420. Required gross income ≈ R14,750.
• R750,000 bond: Monthly repayment ≈ R6,630 Required gross income ≈ R22,100.
• R1,000,000 bond: Monthly repayment ≈ R8,840. Required gross income ≈ R29,470.
• R1,500,000 bond: Monthly repayment ≈ R13,260. Required gross income ≈ R44,200.

These calculations assume no deposit, though a deposit would reduce both monthly repayments and required earnings.

The deposit factor

In most cases, a home loan will require a deposit (unless you obtain a 100% home loan), which is usually 10% of the purchase price. The deposit will reduce your monthly repayments and thus your required earnings.

However, the deposit requirement is about your ability to save over time rather than your monthly salary. Consider drawing up a monthly budget so you can set aside a portion of your salary each month for a deposit. This will reduce the amount you pay on the bond in the long run.

Why current market conditions favour buyers

With rates at 10.25% and the Reserve Bank targeting 3% inflation (suggesting potential for further cuts), now may be a good time to consider homeownership:

1. Improved affordability: Lower required salaries across all property price ranges.
2. Bank competition: Lenders are offering competitive packages, including 100% home loans if you qualify.
3. Government support: First Home Finance subsidies go further in a low-rate environment.
4. Future-proofing: Locking in current rates protects against future increases, if you opt for a fixed rate.

Get an accurate assessment with pre-approval

Getting pre-qualified with ooba Home Loans will give you an indication of what you can afford, as well as provide proof to sellers that you can afford the bond you’re applying for. It’s easier to determine what you need to afford when you have this information.

Pre-approval offers several advantages:

• Credit check: Know your credit score and address any issues before applying.
• Accurate assessment: ooba considers your financial information the same way banks do to provide you with an accurate assessment
• Seller confidence: A prequalification demonstrates that you’re a serious buyer.
• Buyer confidence: It prevents disappointment by placing offers on unaffordable properties.

You can get pre-approved by contacting an expert at ooba Home Loans or by using our free, online pre-approval tool, the Bond Indicator.

Tools to help you calculate affordability

Use our comprehensive range of calculators to determine your exact affordability:

• Bond Affordability Calculator: Determine what you can qualify for.
• Bond Repayment Calculator: Calculate exact monthly payments.
• Transfer Cost Calculator: Budget for additional purchase costs.
• Extra Payment Calculator: See how additional payments can save money.

Get Pre-approved today

Ready to take advantage of the current low-rate environment? Our expert consultants will guide you through every step at no cost, ensuring you secure the best possible deal.

Get prequalified for a home loan today. DIY with our online prequalification tool, or speak to an expert. GET PREQUALIFIED.