How to finance your property deals

It is often said that property buy-to-let investments offers the added benefit of building wealth using other people’s money. I was recently treated to a night out at an EPIC (Entrepreneur Property Investment Community) conference dedicated to Property Finance. I thought that I would share the inside scoop of some traditional and alternative property finance options.

Thanks to Ooba, the mortgage originator, I learnt that:
  • ABSA now uses future rental income in the affordability assessment for buy-to-let investors with 2 or more residential properties in their portfolio.
  • ABSA has increased its LTV (Loan to Value) to 100% for a property with a purchase price up to R3m for traditional business and full time employed applicants.
  • ABSA’s Credit Leading team will consider 100% LTV for properties with a purchase price between R3 and R5 million.
  •  All approved ABSA plot and plan (building loan) developments allow for up to 100% LTV.
  •  Standard Bank’s Jumpstart product offers households with a gross income of R23,300 or less, a maximum loan of R1 million including costs.
  • Standard Bank’s Tiered Interest Rate Option which automatically reduces the interest rate at specific percentage repayment milestones.
  • Nedbank now offers 100% LTV for loans up to R5 million.
  • Nedbank have revised their minimum supporting document requirements for self-employed applicants who draw a monthly salary from their juristic business.
  • Nedbank offers a 50% discount on bond registration costs for qualifying Affordable Housing Loans.
  • Investec are keen to lend to young qualified professionals who are 30 years and younger with a gross annual income of R600,000 or more. 

Another Ooba insight which might be useful for pricing your property deal, indicates that the average interest rate has dropped from Prime plus 0.16% to Prime plus 0.11% in Q1 2019 from a year ago.

Niche Market finance provider Paragon Lending Solutions backed by FNB, offers short, medium and long term lending. An interesting option for applicants wanting to flip properties is Paragon’s 6 to 12 month loan with interest only repayments.

If you are looking to invest in rental property in the inner cities try out TUHF who specialise in commercial property finance for residential and mixed-use properties.

This is a not an exhaustive list of lenders or their products and their T&Cs obviously apply.

And remember research is essential, TPN’s Property ReportKit includes a wealth of knowledge from the estimated value of a property, the rental price index and suburb trends such as average gross yield, good standing ratio of tenant payment performance and so much more!

Looking for an investment property? Try TPN PropBay.


* LTV - Loan to Value is a ratio based on the size of the loan granted in relation to the value of the property. For example, a R100 000 property value with a R80 000 bond has an 80% LTV.  

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