To top

Which bank offers the best home loan?

Choosing to buy a home is an exciting but stressful experience. We compare the home loan offers of South Africa’s biggest banks to help you choose the best option.

12 July 2022 · Danielle van Wyk

Which bank offers the best home loan?

Choosing to buy a home is an exciting decision. However, applying for a home loan can be a stressful experience, from filling out the paperwork to comparing the interest rates and navigating the potential red tape. However, it needn’t be.

We compare the home loan offerings of South Africa’s biggest banks to help you choose the best option.

Tip: Your credit score can influence your home loan offering. View your credit score now.

Let’s compare banks offerings for home loans 

The following table shows the basic home loan offerings from Nedbank, Standard Bank, Absa, and First National Bank (FNB). It also compares the monthly service fees, initiation fee, cash deposit fees, and early termination process.


Monthly service fee*

Initiation fee

Cash deposit fees**

Early termination process




R75 + R2 per R100 or part thereof

The early-termination fee is determined as three months’ interest (based on your outstanding balance, interest rate and remaining loan term).

If the bond is cancelled before the 90-day period, the pro-rata amount will be charged for the remaining days.

Standard Bank



R80 + R2.25 per R100 or part thereof

Should you wish to cancel your bond before the agreed contracted loan term, you are required to provide 90 days' notice in writing.

If the required notice has not been given or if it has expired, you will be charged 90 days' pro-rata interest based on your outstanding balance at the time of request for cancellation.




R80 + R2.50 per R100

If a large agreement (including all mortgage agreements) is cancelled, an early termination charge may be levied equal to a maximum of 90 days’ interest, which will be reduced proportionately with any notice period given.




R60 + R2.10 per R100

Waived for 2022

*For purposes of comparison, monthly fees are shown only for accounts governed by the National Credit Act (NCA).

**These fees apply to in-branch cash deposits.

The results are in…

Common to all of the banks is the R69 monthly service fee. The initiation fee is essentially the same, but the early termination fee is the big difference for 2022, with FNB having waived this. FNB also comes in as least expensive for cash deposit fees.

According to an Absa in-branch consultant, another key metric for determining which bank is, in fact, offering the best price is the interest rate. The interest rate determines the cost of the loan, and it affects your instalment price.

This, however, is difficult to compare on a general basis, as the interest rate is dependent on numerous factors. These include affordability assessments, the client's credit profile, current economic factors, and the loan amount and term.

Banks typically implement variable interest rates. These are based on the prime interest rate, which is determined by the repo rate – the interest rate at which the South African Reserve Bank lends to banks. As at time of writing, this rate was 8.25%.

“If not fixed, the interest rate has the potential to fluctuate as the repo rate and other economic factors change,” says the Absa consultant.

What’s important to note is that consumers do have the option of fixing their interest rate, which allows them the benefit of paying one stable rate for the duration of the repayment period.

There are however various disadvantages to this option. The banks tend to charge a higher interest rate to mitigate their risk, and if the repo rate and prime interest rate decrease, you will not benefit from this.

Shopping for a home loan?

If you’re in the market for a new home, here are a few things you should consider:

  • Be clear about what it is you are looking for in a home. Ensure it meets you and your family’s needs, expectations, and lifestyle.
  • Be realistic about what you can afford, and be aware of the status of your credit profile.
  • Shop around for the best home loan offer.
  • Should you venture outside of the banking institutions to other lenders and institutions, ensure that you are dealing with a legitimate entity.

Protecting your home is equally vital. For a free home insurance quote today. 

Make good money choices - join 250,000 South Africans who get our free weekly newsletter! Join the community →
JustMoney logo  
5th Floor, 11 Adderley Street, Cape Town, 8001

© Copyright 2009 - 2024 
Terms & Conditions  ·  Privacy Policy

Quick links

Your credit score is ready!

View your total debt balance and accounts, get a free debt assessment, apply for a personal loan, and receive unlimited access to a coach – all for FREE with JustMoney.

Show me!