What costs can be included in a home loan in South Africa?
A standard South African home loan covers the purchase price only. The one cost routinely added to the bond is the bank's initiation fee of R6037.50. Some lenders lend above 100% to absorb other upfront costs — but transfer duty can never be financed. bond.co.za explains what works and what stays cash.
- Financed into the bond: the bank's once-off initiation fee, up to the National Credit Act maximum of R6037.50 incl VAT.
- Absorbed by above-100% lending: bond registration and transfer costs — select lenders let you borrow up to 108% of the purchase price to cover them.
- Always cash: transfer duty (R0 up to R1 210 000, but never financeable) and any costs your lender won't cover.
By Neil B · Checked against published primary sources · Published 2026-10-27 · Last verified 2026-10-27
Every financed cost is repaid at your bond rate, so what it costs to add fees to the loan moves with prime. The next SARB MPC decision is 19 Nov 2026.
Source: South African Reserve Bank (SARB) MPC statement. Last verified 23 Sept 2026.
Excludes bond registration and transfer costs. A quarter-percent rate difference on this loan changes the repayment by R 254 a month — which is why offers are worth comparing.
What costs can be included in a home loan?
One cost is routinely included in a South African home loan: the bank's once-off initiation fee, R6037.50 including VAT — the maximum the National Credit Act permits for a mortgage agreement (Reg 42(2) Table B, verified 15 Oct 2026). Every other cost in the transaction — transfer duty, conveyancing fees, Deeds Office fees — must be paid in cash before registration, unless your lender writes a loan above 100% of the purchase price.
The reason is structural. A bond is secured against the property, so the bank will only lend against what the property is worth — and costs like transfer duty are not part of the property's value. That is why a 100% bond is called 100%: it finances the purchase price and nothing else. The initiation fee is the exception because it is a charge on the loan agreement itself, which the Act allows to be capitalised into the principal.
How the initiation fee works in detail — who charges it, and the juristic-person difference — is covered in our bond initiation fee guide.
Can closing costs be included in the loan amount?
No — with one exception. "Closing costs" is American terminology; the South African equivalents are transfer duty, the transfer attorney's (conveyancing) fee, the Deeds Office fee and once-off charges like rates clearance. On a standard bond none of them can be financed: they fall due in cash during the transfer process, weeks before registration, and the bank lends against the purchase price only.
The exception is above-100% lending, where a bank deliberately writes a loan larger than the purchase price so the extra covers these costs. Qualifying is harder — it is aimed at strong credit profiles on lower-value properties — and the section below sets out which lenders offer it. If the costs cannot be financed, they have to be budgeted: the rule of thumb is 8–10% of the purchase price on top of your deposit.
What goes into the bond — and what must you pay in cash?
The full cost sheet on a R 1 200 000 purchase with a 100% bond, showing for each cost whether it can be financed.
| Cost | Into the bond? | Amount on a R 1 200 000 purchase |
|---|---|---|
| Bank initiation fee | Yes — routinely | R6037.50 incl VAT (NCA maximum) |
| Transfer duty | No — cash before registration | R 0 at this price (0% up to R1 210 000) |
| Transfer attorney (conveyancing) fee | No — cash before registration | R 32 654 incl VAT |
| Deeds Office transfer fee | No — cash before registration | R 1 738 |
| Bond attorney (registration) fee | No — cash before registration | R 32 654 incl VAT |
| Deeds Office bond fee | No — cash before registration | R 1 738 |
| Rates clearance, levies, once-offs | No — cash | Varies by municipality and body corporate |
Amounts computed at today's published tariffs: conveyancing and Deeds Office fees per the 2026 fee guides used by our bond and transfer cost calculator; transfer duty per South African Revenue Service (SARS) (table effective 01 Apr 2026, verified 06 Sept 2026); initiation fee per National Credit Act, No. 34 of 2005, Reg 42(2) Table B, as substituted by GN 1080 / Government Gazette 39379 (fee tables effective 6 May 2016) (verified 15 Oct 2026).
What does it cost to add the initiation fee to your bond?
Financing the R6037.50 initiation fee instead of paying it upfront adds about R 61 to your monthly instalment on a 20-year bond at prime of 10.75% (effective 25 Sept 2026, per South African Reserve Bank (SARB)). Over the full term, though, you repay about R 14 711 — roughly R 8 673 of that is interest. The fee effectively more than doubles.
The practical read: adding the fee is cheap monthly and expensive over the term. If you can pay the R6037.50 from cash at registration, you save the interest; if cash is what stands between you and registering, the small monthly addition is usually worth it. You can also pay it upfront and borrow less elsewhere — the interest saving is identical either way.
Which lenders let you borrow above 100%?
A handful of lenders write loans larger than the purchase price so the extra can absorb upfront costs. Terms are product-specific and change — always confirm with the lender before you rely on them.
Standard Bank publishes a home loan of up to 108% of the purchase price for loans up to R3 million, explicitly so the extra 8% can help cover upfront costs (Standard Bank buying-a-home product page, verified 27 Oct 2026). Investec's private home loan lets you finance transfer, conveyancing and Deeds Office costs plus up to R5,000 of miscellaneous costs into the loan (Investec Private Home Loan factsheet, verified 15 Oct 2026). Absa allows the initiation fee to be added to the loan once the bond registers rather than paid upfront (Absa consumer disclosure, verified 15 Oct 2026). Lenders in the 105% space are offered through bond originators as a product category, aimed at buyers with strong profiles who are cash-short rather than income-short.
Two cautions. Above-100% lending is approval-tiered: it is aimed at strong credit profiles, usually on properties below the lender's value ceiling, and is never guaranteed. And the extra borrowed amount is repaid with interest at your bond rate over the full term — the same arithmetic as the initiation fee example above, at a larger scale. Product terms change; confirm the current offering with the lender or through an originator who submits to multiple banks before you budget around it.
How much cash do you still need on registration day?
On a R 1 200 000 purchase with a 100% bond, the cash you still need — after financing the initiation fee — is about R 74 822: the transfer attorney's fee of R 32 654 incl VAT, the Deeds Office transfer fee of R 1 738, the bond attorney's fee of R 32 654 incl VAT, the Deeds Office bond fee of R 1 738, and transfer duty of R 0 — zero, because the price sits under the R1,210,000 threshold where the SARS duty rate is 0% (effective 01 Apr 2026). Above that threshold, transfer duty climbs quickly and the cash figure with it.
The full cost breakdown at every price band — what the buyer pays, what the seller pays, and where the money goes — is on the transfer and bond costs guide, and the duty brackets are detailed in our transfer duty guide. Run your own price through the free bond and transfer cost calculator to get your exact cash-to-registration number.
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Costs included in a home loan: FAQs
Can closing costs be included in the loan amount?
Mostly no. In South Africa the costs the US calls "closing costs" — transfer duty, the transfer attorney's fee and the Deeds Office fee — are due in cash before the property can be registered, and a standard bond covers the purchase price only. The one cost routinely financed into the loan is the bank's once-off initiation fee (R6037.50 incl VAT, the National Credit Act maximum). The exception is above-100% lending: some banks lend up to 108% of the purchase price specifically to absorb these upfront costs.
Can transfer duty be added to your bond?
No. Transfer duty is a tax paid to SARS and cannot be financed into a home loan — it must be paid to the transferring attorney before the Deeds Office can register the transfer. The only ways to avoid paying it from cash are an above-100% bond that covers it alongside the purchase price, or buying a property of R1,210,000 or less, where transfer duty is 0% (SARS table, effective 1 April 2026).
What fees can be added to a home loan?
The bank's once-off initiation fee — R6037.50 including VAT, the National Credit Act maximum for a mortgage agreement — is the fee lenders routinely add to the bond. Absa, for example, lets you add it to the loan once the bond registers instead of paying it upfront. Everything else on the cost sheet — transfer duty, conveyancing fees on both the transfer and the bond, Deeds Office fees, rates-clearance and once-off charges — is payable in cash, unless you qualify for an above-100% loan.
Is it worth adding the initiation fee to your bond?
It depends on your cash position. Financing the R6037.50 fee into a 20-year bond at prime adds about R 61 a month — but over the full term you repay about R 14 711, of which roughly R 8 673 is interest (figures computed at prime of 10.75%, effective 25 Sept 2026). If you have the cash, paying it upfront saves the interest; if cash is tight at registration, the small monthly addition is usually the right trade.
Informational disclaimer
This guide is for information only and does not constitute financial advice. Lender product terms — including above-100% lending and which costs may be financed — are set by each bank and change without notice; the figures cited here carry the verification dates shown and should be confirmed with the lender before you rely on them. The prime rate shown is the publicly quoted commercial prime lending rate, current as at 23 Sept 2026, and changes at SARB Monetary Policy Committee meetings. Speak to your bank or a qualified financial adviser before making a borrowing decision.
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