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Here’s what you need to know

  • Buying land

    When looking for land to buy and build on: 
    • Think about accessibility: Your future home should ideally be close to schools, public transport, hospitals and shopping centres, to make life easier for you.
    • Check the soil: Clay and dolomite will require a stronger building foundation, which means that your materials will cost more.
    • Consider whether the ground surface is level: If not, you’ll need to hire heavy duty machinery to dig and level out the area or you’ll have to hire extra workers to do this by hand.
    • Check building/zoning restrictions: Consult an architect and town planner to determine whether you can build your home on the land you want to buy.
    • Consider the existing infrastructure: Find out whether the local municipality provides water, sanitation and electricity to the area.

  • Building costs

    • Get different quotes from different service providers and compare the costs to find the quote that works best for you.
    • Your builder should be registered with the National Home Builders Registration Council (NHBRC) to ensure their credibility and work quality.
    • Budget at least 20% extra for unforeseen circumstances.
    • If there are any changes to the contract or structure agreed on, the costs may increase and delay your progress payments.
    • Single-level square houses are less costly compared to complex multi-story ones.
    • The cost of boundary walls and a swimming pool (if you plan to build one) must be included in your building contract and may be covered by your Building Loan.
    • You’ll need to pay for landscaping and finishes yourself.
    • Fees for architects, engineers, a project manager and a builder will be paid through the progress payments.

  • The building process

    • Once you’ve found your ideal piece of land, make an offer to the seller via an offer to purchase and start your Building Loan application. 
    • Start drawing up your building plans with an architect and find an NHBRC-registered builder. 
    • You’ll also need the following documents: 
      • Tender (for a Building Loan of up to R5 million) 
      • Bill of quantities (for a Building Loan of over R5 million) 
      • Building contract, NHBRC certificate and NHBRC enrolment certificate 
      • Building plans and schedule of finishes 
      • Signed engineers certificates for the foundation, slabs (multi-storey) and roofing 
      • Entomologist, poison or pest control certificate. 
    • Call 0860 111 007 to speak to an Absa Building Consultant. 

  • Your Building Loan

    • Your Building Loan amount will be based on the market value of your home after it had been completed. The shortfall will be paid by you.
    • If you receive a lower amount than what you applied for on your Building Loan, a building deposit may be required.

  • Building and progress payments

    • You’ll pay your builder according to the terms of your building contract. 
    • If there’s any shortfall, you’ll have to pay this first plus an additional 10%. Once done, you can request a 10% progress payment from the bank. 
    • Your first progress payment will be paid when your builder completes the foundation. 
    • A bank-approved evaluator will assess the work done and sign off so that you can move on to the next building stage. As each stage is completed, progress payments will be made. 
    • You’re allowed a total of six progress payments throughout your building process.  
    • The final payment will only be made once the occupancy certificate and insurance confirmation are received. 
    • Your monthly debit order will begin nine months after your Building Loan has been registered, even if your home is not complete. 
    • The interest on your Building Loan will be added over nine months, so we recommend that you start paying off your loan as soon as possible. 
    • During the nine months, we’ll continue to pay your progress payments as you complete the stages of your building plan. 
    • Staying up to date with paying off your interim interest is important, as missed payments will be added to your outstanding Building Loan, which will decrease the funds you have available for construction.  

The best way to build your home

Building a home exactly the way you want it is a dream for many people, but it is possible. Careful planning, budgeting and making sure you have a reputable builder – along with lots of guidance - is the only way to do it. It doesn’t cost a cent to plan so why not start now? Your dream home could be nearer than you think.

Explore our range of home loan solutions

Solar and Energy Finance

Solar and Energy Finance
Interest rate discount 
0.20%
Maximum loan
R300 000

Make power cuts and high utility bills a thing of the past and get 0.20% off your interest rate.
Ts & Cs apply.

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Building Loan

Building Loan
Loan amount
Up to 100%
Maximum term
30 years

Design and build your home your way with a competitive interest rate and six progress payments.

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Read more related to this topic

Find out everything you need to know about owning a home, right here.

Understand progress payments

How to make partial payments towards building your new home.                                                                              

See more

Must-have documents

Here’s what documents you’ll need during the building application process.                         

See more

Protect your home while building

Find the best NHBRC-registered builder and insure your property to get the most out of it.                                           

See more

Building or buying?

It’s an investment for your future. We’ll help you make the best decision.

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Need more help?

Access our self-service tools.

 

Contact us

Call: 0860 111 007

International: +27 11 501 5048

Email: propertyhub@absa.co.za