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A request to cancel the bond will be issued to the bank by the attorney who is nominated by the customer. On receipt of this request, the bank will calculate the cancellation figures which will be issued to the bank's cancellation attorney together with the Bond document and Title Deed to start the cancellation process. The bank's cancellation attorney will liaise with the customer's transferring attorney.
In terms of the National Credit Act and our legal agreements that fall outside the ambit of this Act, an early termination fee can be charged when you cancel your home loan without giving us the requisite 90 days' notice of your intention to settle your home loan and cancel your bond before your loan term expires.
As a valued client, you can now cancel your home loan anytime with us without incurring any early termination charges.
As a way to demonstrate your savings, we want to illustrate how the fee is charged therefore showcasing the saving you will make:
The early termination fee is calculated using your outstanding balance and your current interest rate for 90 days.
The following illustrative example is based on a home loan with an outstanding balance of R500 000 at an annual interest rate of 10.5%.
R500 000 X 10.5%/ 365 days x 90 days
= R12 945.00 - this is the amount you will save.
You are required to provide the bank with notice if you intend to sell your home or cancel your bond. This is in addition to the attorney requesting cancellation figures/letters of guarantee for the existing mortgage bond.
On receiving a cancellation request, the bank will calculate the settlement figure. Assuming that the mortgage bond will be cancelled within 90 days, the settlement figure will be calculated as follows:
The Flexi Option will be made inactive and you will be unable to access funds while your bond is under cancellation. Should you require access to funds please ensure you withdraw these funds prior to cancellation instruction.
The settlement figure is based on you continuing to make normal repayments on the home loan during the cancellation process. During the cancellation process, the customer must continue monthly repayments to the home loan. Not maintaining these repayments during the cancellation process will place the account in an arrear state, whereby the collection process may start. This will negatively impact your credit record.
Please note that no provision has been made for attorney cancellation costs in the settlement figure provided to the attorneys. Attorney cancellation costs include fees charged by the attorney for the cancellation of the bond and are payable directly to the attorney.
The attorney will charge a fee for the cancellation which occurs in the Deeds office, as well as a fee for administering the cancellation.
The final debit order on the home loan will be retained for a period of 40 days after cancellation of the bond. This is necessary to mitigate the risk of a debit order being reversed after the cancellation refund has been paid out and the home loan closed.
Once the bond is cancelled, the attorneys will pay the bank in accordance with the guarantees provided. This amount will be credited to the home loan account and any surplus funds will be refunded in terms of arrangements made with you and the attorney. The home loan account will be closed.
HOC impact once your home loan is paid up and the bond is cancelled.
The following applies for FNB Short Term Insurance HOC premiums debited to the home loan account, on cancellation of the bond:
If the property is insured through an alternate insurer, the customer will need to make the necessary arrangements with the insurer.
FNB customers will receive the following benefits when applying using nav» Home
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Terms & conditions apply.
Once the Home Loan is under cancellation you will no longer be able to view or access the facility online.
Make sure you know what process to follow to cancel your home loan, including all the costs involved. You are required to provide the Bank with notice if you intend to sell your home or cancel your bond before the end of your bond period.
Request to cancel
Early termination fee - waived
Flexi Option and Prepaid on a paid-off home loan
Home loan repayments
Attorney cancellation cost
Retaining the final debit order repayment
Proceeds received from the sale of your property
Home Owners Cover ("HOC") after cancellation
Value adds when cancelling
Online banking while cancelling
Download a comprehensive document on cancelling your home loan