What are the real costs of buying a home?

The real cost of buying a home includes the purchase price as well as additional expenses such as transfer duty, bond registration costs, legal fees, insurance, and ongoing monthly repayments.

What is transfer duty and when do I pay it?

Transfer duty is a tax paid to SARS when purchasing a property above a certain value threshold. It is typically paid before the property is transferred into your name.

What are bond registration costs?

Bond registration costs are legal fees charged by attorneys to register your home loan with the Deeds Office. These costs depend on the value of the bond.

Are there legal fees when buying a home?

Yes, legal fees include transfer attorney fees and bond attorney fees. These cover the legal process of transferring the property into your name and registering the bond.

Do I need a deposit to buy a home?

A deposit is not always required, but paying a deposit can reduce your home loan amount and monthly repayments. Some buyers may qualify for a 100% home loan depending on affordability.

What ongoing costs should I expect after buying a home?

Ongoing costs include monthly home loan repayments, property rates and taxes, homeowners insurance, maintenance, and utilities such as water and electricity.

What insurance is required when buying a home?

Homeowners insurance is usually required to protect the structure of the property. Life insurance or credit protection may also be required to cover the home loan in case of unforeseen events.

How can I calculate the total cost of buying a home?

You can use Absa’s home loan and affordability calculators to estimate your monthly repayments, upfront costs, and overall affordability based on your income and expenses.

Can I include additional costs in my home loan?

In some cases, certain costs such as bond registration fees may be included in your home loan, depending on your loan approval and affordability assessment.

How can I prepare financially before buying a home?

You can prepare by saving for upfront costs, improving your credit score, reducing debt, and using affordability calculators to understand what you can realistically afford.

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Understanding the cost of buying a home

At Absa, we aim to make buying your home as easy as possible.

Get pre-qualified Apply now

At Absa, we aim to make buying your home as easy as possible.

Get pre-qualified Apply now

It’s a big purchase and too many buyers think they only need enough money to pay their deposit and monthly home loan repayments. However, there are extra fees that must be paid to transfer the property into your name, to register your bond (home loan) and more.

Costs you need to consider

To make it easier for you to plan your budget we have put together a list of the costs you will need to pay in order to own your new home.

Bond registration and transfer costs
These costs are charged for ensuring that the bank’s mortgage bond is registered, and transfer of ownership takes place. These services are performed by qualified Conveyancers and is done by the bond registration attorney and the transferring attorney (can be the same or different Attorneys).

Transfer duty:

Transfer duty is applicable when acquiring properties that are bought or are valued for more than R1 000 000.

It is a tax that is payable to SARS and is based on the purchase price or value of the property.
Initiation fees
A one- time sum of R6 037.50 is the fee to initiate the home loan and to open your home loan account.

This fee can be added to your home loan account once your bond is registered or can be paid by you as a once off payment.
Deposit (optional)
Paying a deposit is recommended as it means you will only need to finance the balance of the purchase price. It can save you money as you will not need to finance the full purchase price. If the bank does not grant you the full loan to cover the purchase price, a deposit is payable to the Transfer Attorney, in terms of the Deed of Sale.

Your deposit is the difference between the purchase price and the loan amount of the property. It will not cover transfer duty, bond registration costs, transfer costs and initiation fees – these are costs you will still need to pay.
Insurance costs
Homeowners insurance – if you are buying a free-standing property you need this type of insurance before your home loan is registered.

Life insurance will cover your home loan in the event of death, disability (and sometimes retrenchment) – this is compulsory if you have a MyHome Home Loan and is required before registration of your bond
Additional costs
You will be charged a monthly administration fee to maintain your account.