Build your dream home

Let us help you through the entire process of building your dream home. We've made it easier for you to build a new home or make improvements to your existing one.

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Why choose us

With us a building loan is more than just a loan. Not only do you enjoy the freedom to design or renovate your home the way you want it, you also enjoy a number of benefits to streamline the process and give you peace of mind.

Make sure you're covered

Ensures that the property is covered from the first day you take ownership.

Draft your own Will today

Draft your own last Will and testament in a few easy steps.

Limited to six progress payments

Manage your building loan with progress payments.

How it works

How does a building loan work?

The application will be assessed on receipt of the necessary documentation in line with the policy and lending criteria of the bank. Assuming the bank is in a position to assist, the bank will require the customer to finance 10% of the total package price (land + contract amount) upfront, in all instances; this however could increase dependent on the credit profile score of the applicant(s). The 10% requirement is based on the bank's assessment of the completed value of the property. If the customer is granted a loan amount with a shortfall (a loan amount of less than the contract price), the customer will be required to complete building to the value of the shortfall amount upfront from his/her pocket. Additionally, the bank will require the builder to build a further 10% of the contract price from his/her funds before any funds will be paid out from the Home Loan account. The final quote will have a condition stipulating this requirement and the customer will be advised of the requirement when final customer contact is made. You have 12 months to complete the building. Construction work must commence within the first 3 months following registration. Your loan term is limited to 240 months.

Will I be required to make repayments?

Yes. You will be required to make repayments towards the capital amount as well as the interest during the building period.

Interim interest

You only pay interim interest on the Building Loan until the building is complete. Once it is complete normal capital and interest payments become payable. If the construction period takes longer than 12 months, interest and capital become payable once the 12 month period allocated to the construction expires (unless the customer has obtained approval from the bank to extend the building period).

Variable interest

You will be limited to the variable interest rate until the building has been completed. On completion of the building, you may apply for a fixed rate.

Progress payments

You can apply for progress payments at any stage during the construction process provided that sufficient work has been completed and the bank is satisfied with the progress. A maximum of six progress payments will be allowed, based on the work completed. Progress payments are calculated on the contract amount as the loan amount financed to the customer may not be equal to the total amount required to construct the dwelling. As progress draws are limited to six payouts, the process must be managed between the builder and the customer.

What it costs

Building a home involves once-off and monthly costs. Here are the key costs to plan for.

Purchase price deposit

Varies according to property value.

NHBRC enrolment fee

Ranges between R6,500 and R34,000.

Registration and transfer costs

Fees paid to the attorneys handling registration and transfer.

Transfer duty

Government tax based on the purchase price.

Monthly home loan repayments

Capital and interest repayments on your registered loan.

Property and life insurance

Home Owners Cover, life assurance and household content insurance.

Consider options best suited to you

When buying or selling property, costs pertaining to registration and transfers need to be considered. Select the applicable link below to have a better understanding of our cost structure and costs involved in finalising the process.

Insurance

Home Owners Comprehensive Cover

You are going to need Home Owners Cover (HOC). Residential properties are prone to damage from fires, flooding, burst geysers, plumbing and natural disasters. HOC is therefore absolutely essential, as it covers these damages and losses to property. In terms of our home loan agreement with you, HOC is a requirement. The property remains security of the bank, it is therefore a requirement that you take out adequate cover for the duration of the loan. A suitable HOC insurance is conditional and subject to the bank's approval, irrespective of the underwriting insurer, prior to registration of your bond; and has to be maintained for the duration of the loan agreement. Any insurer may be used as long as the bank's requirements are met within the terms of the policy. Please note that, should you use an insurer other than the one recommended by the bank, you will be required to provide us with an updated policy following the renewal month of the policy on an annual basis.

Life Assurance

Life is full of uncertainties, and no one plans to die and leave their loved ones with a financial burden. While the future is unknown, you can help prevent your loved ones from facing additional financial difficulties when dealing with your death, which can already be distressing. You may be required to provide life cover before registration.

You can either accept FNB Life's competitive Life Assurance quote, called Mortgage Protection Plan, which covers the outstanding balance of the loan, or insure the value of the home loan with an acceptable underwriter. This is subject to the policy having sufficient cover to pay off the outstanding balance, or registered bond amount, at the time of cession. Please note that FNB may reject any proposed credit insurance if it is not suitable.

Our conditions stipulate that the policy must:

Be ceded to FNB with outright cession rights. If a policy is ceded, the rights of the cessionary take precedence and will be paid before any payments to nominated beneficiaries
Contain the start date and total amount of cover
Ensure that, in the case of joint account holders, all bond applicants have life assurance to the value of the total registered bond amount

Mortgage Protection Plan (MPP)

Where the principal loan amount is equal to or less than R1,000,000, the maximum cover will be capped at R1,000,000 per property, per applicant, with a cumulative maximum of R2,000,000 per applicant. FNB Home Loans will require life cover as a condition of the loan being granted on new and further loans for joint or individual applicants.

A competitive quote from FNB Life, called Mortgage Protection Plan (MPP), will be provided for applicants aged 64 years or younger. There are certain instances where this may not be a requirement, but these will be specified in the conditions of the loan being granted.

The MPP covers the outstanding home loan amount in the event of your untimely death or permanent disability. The premiums payable for MPP are dependent on the previous month's average outstanding home loan balance and reduce as the home loan is paid off.

However, you are entitled to provide your own policy to be ceded to the bank, subject to the policy having sufficient cover to pay off the outstanding balance, or registered bond amount, at the time of cession.

Insurance

The builder has to provide Builder's All Risk Insurance over the property until completion; thereafter in terms of your Mortgage Loan Agreement, you will need to provide the bank with suitable home owner's comprehensive insurance that complies with the bank's criteria.

Documents required during construction

1

Prior to registration of the bond

Copy of the approved local authority building plan

2

Prior to first progress payment

Occupancy certificate from the local authority
Electrical wiring compliance certificate from the builder
Any other condition as stipulated in the Grant of Loan (i.e. Engineers certificate)
Home Owners' Comprehensive (HOC) Cover that meets the bank's requirements

3

Prior to any progress payment

NHBRC unit enrolment certificate and Builders NHBRC
Builders All Risk Policy
Any additional documents required as per the Grant of Loan

4

Prior to final progress payment

An Occupancy Certificate from the local authority
An Electrical Wiring Compliance Certificate from the builder
Any other condition as stipulated by the valuation department, e.g. engineers certificates, etc.

5

On date of completion

Electrical compliance certificate
NHBRC enrolment certificate
Occupancy certificate
Borer beetle or entomologist certificate (if applicable)
Gas installation certificate (if applicable)
Roofing certificate (if applicable)
Plumbing certificate (if applicable)

Qualifying criteria

•Above 18 years old

•Individual min. income of R25 000 per month or where a joint application, at least one of the individuals must earn a min. of R25 000 per month

•Must have a clear credit record

•Loan can only be used to build

Required documents

•Completed and signed Building Loan application form

•Signed Offer to Purchase/Building contract to purchase erf

•Detailed building plans in .pdf format with FNB Tender and Building Specifications

•NHBRC unit enrolment certificate and Builders NHBRC certificate

•Schedule of finishes, quotation for entire building works and breakdown of costs

•Supporting income documents as required on the application form

Get your building loan

Let us help you through the entire process of building your dream home with an FNB Building Loan.

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Need to know more or want to start the process? Let us call you back.

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Building loans will not be granted on: Real right portions in any development, Share blocks properties, Non-residential buildings, Fractional ownership. FNB Home Loans will NOT finance owner-builders or Future Use Building Loans on vacant land.