Buying a home for the first time is an exciting milestone, but for many South Africans, the financial commitment can feel overwhelming. From the deposit and bond registration fees to legal costs and ongoing expenses, there are several financial aspects that buyers need to prepare for. According to Antonie Goosen, principal and founder of Meridian Realty, understanding these costs upfront and having a solid savings plan can make homeownership more attainable.
One of the biggest hurdles for first-time buyers is the deposit. While some banks offer 100% home loans, many lenders require a deposit of at least 10% of the purchase price. The higher the deposit, the lower the monthly bond repayments, making it a wise financial move in the long run. But the deposit is just one part of the equation. Buyers must also budget for transfer duties, which apply to properties valued above R1.1 million, as well as attorney fees for bond registration and property transfer. These legal costs can add up to a significant amount, often catching first-time buyers by surprise.
Beyond the upfront costs, buyers need to plan for ongoing expenses such as municipal rates, homeowners' insurance, levies for sectional title properties, and general maintenance. Goosen advises first-time buyers to be realistic about their monthly affordability. “It’s not just about whether you can qualify for a bond, but whether you can comfortably manage all the additional costs that come with owning a home. Budgeting carefully from the start will help avoid financial strain down the line,” says Goosen.
Saving for a home requires discipline, but there are several strategies that can help accelerate the process. Setting a clear savings goal and automating monthly contributions to a dedicated account can make a significant difference over time. “Cutting back on non-essential expenses, such as frequent dining out or subscription services, can also free up extra funds. Finding additional sources of income, whether through freelancing, selling unused items, or taking on a side hustle, can further boost savings. Some buyers may also qualify for government subsidies, which provides financial assistance to low- and middle-income earners purchasing their first home,” says Goosen.
A good credit score can also make homeownership more affordable. Banks offer better interest rates to buyers with strong credit histories, which translates to lower monthly repayments. Paying off outstanding debts, making timely payments on existing accounts, and avoiding unnecessary credit applications can help improve a buyer’s credit profile before applying for a bond. Goosen points out that many first-time buyers don’t realise the impact of their credit scores on their home loan approval and repayment terms. “A lower interest rate, even by just a fraction of a percent, can save you hundreds of thousands of rands over the lifetime of your bond.
“For those struggling to save for a deposit, no-deposit home loans are an option, although they typically come with higher interest rates. Some first-time buyers also turn to family members for financial assistance, whether in the form of a loan or a gift to help with upfront costs,” says Goosen.
Employer housing benefits are another avenue worth exploring. Some companies offer subsidies, low-interest loans, or financial planning support to help employees purchase their first home. Additionally, buyers who are open to purchasing fixer-uppers or homes in emerging areas may find more affordable options with potential for long-term value appreciation.
With careful planning and smart financial decisions, buying a first home is within reach. Goosen believes that first-time buyers who educate themselves about the costs involved and use available financial tools will have a much smoother home-buying journey. “The key is to plan ahead, save strategically, and make informed choices. Homeownership is a long-term investment, and those who approach it wisely will reap the rewards in years to come,” concludes Goosen.
