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Standard Bank Home Loan Review 2023

Standard Bank Home loan

Standard Bank Home Loan is a home loan available for various types of home financing with an initiation fee of R6,037.50. Companies can also apply for a Standard Bank Home loan, with an initiation fee of R13,110.00.

The monthly service fee for the Standard Bank Home loan is R69.00. A monthly service fee of R240.00 is charged to businesses. Standard Bank Home Loans are available to both businesses and individuals, with businesses incurring higher account expenses than individuals.

Standard banks provide various types of home loans to accommodate various home and commercial property buyers. Each type of loan has its own set of rules and regulations. For example, a construction loan requires that the home-building process adhere to the NHBRC.

In addition to home loans, Standard Bank offers home loan advice. When it comes to property education, the Standard Bank property blog is one of the most effective. Reading the blog can help you make well-considered decisions when applying for a home loan.

With different types of home loans available, we discuss each home loan solution in detail below.

Standard Bank Home Loan Solutions

Standard bank has three home loan solutions for businesses and individuals. Loans in place are for home buyers and building loans. We will have a look at each home loan solution offered by Standard bank including solutions available for existing home loan account holders.

1. Building loan

Standard Bank building loan is a home loan solution that is available for individuals and companies that want to build a house from the ground up. Every time Standard bank issues a building loan, the bank will have to always comply with the Housing Protection Measures Act No 95 of 1998. The Housing Protection Measures Act No 95 of 1998 laid down ground rules that every bank in South Africa adheres to before approving a building loan. Standard Bank will have to ensure that

  • The builder is registered with the National Homebuilders Registration Council (NHBRC),
  • The home has to be enrolled with the NHBRC, and
  • That relevant fees are to be paid to the NHBRC.

Any individual who applies for financial assistance from Standard bank and does not meet the aforementioned criteria will be denied. There are some critical points to understand that apply to all construction loans. We will look at various loan categories for both juristic entities and natural persons. Please note that these terms and conditions apply only to the Standard bank building loan.

Fund advances

A Standard Bank building loan is not paid in full, that is, not all of the money is distributed at once. The funds are debited from the loan account as and when they are required. For instance, if you require funds to purchase construction supplies, the funds will be deducted to the precise quantity requested. The funds will be debited in phases by Standard Bank. This is true for both individual and corporate building loans. During the construction phase, a portion of the funds will be deposited directly with your vendors.

Joint Accounts

The Standard Bank allows individuals to apply as a joint unit for affordability purposes. Doing this will allow the applicants to achieve the minimum qualifying criteria or even be able to clear the building loan before time or put up a higher down payment on the loan.

Taking a joint loan means that both borrowers will incur the liability of the building loan. The obligation to repay the building loan lies on the two parties that are on the joint account.

Building Insurance

The building insurance is applicable to those that take out a building loan. This is because Standard bank and the borrower will be joint owners of the building so the insurance will protect Standard bank’s interest in the building.

The Standard bank doesn’t restrict borrowers on choosing an insurer of their choice. However, the building insurance will then have to last for the duration of the building loan agreement.

Credit life insurance

Credit life insurance will only be applicable to certain clients. The bank doesn’t clarify which customers are obligated to get credit life insurance. However, Standard bank states that it will notify the borrower if they should or shouldn’t take credit life insurance.

If Standard bank requires a customer to take a credit life insurance, that insurance will need to be active for the duration of the building loan agreement.

Documents required at different stages to complete the building of a home

The bank requires a number of documents before the loan can be approved. Firstly, you are required to submit certain documents on your application process that Standard bank will consider in its decision-making process. Documents that Standard bank require for decision making includes:

  • NHBRC builder’s registration certificate.
  • An offer to purchase of land or title deed if you already own the land that the building is going to take place.
  • Building Provisional plans that include but not limited to improvement size, architect drawings, etc.
  • Contract and quotation.

The next step before building a home or a commercial building is the title deed ownership. This will be completed with the help of attorneys. You will sign the title deed if you are the owner of the land. To complete this stage, you will need to provide your proof of residence not older than 3 months, ID copy and marriage certificate if married. The final stage happens after the bond is registered. This is the stage at which the building process starts . Documents that are needed at this stage include:

  • Builders all-risk policy,
  • Electrical certificate,
  • Approved plans prior to the first draw,
  • Engineer’s certificate for slab and stairs,
  • Occupancy certificate prior to the final draw, and
  • Damp-proof guarantee.

2. Home loan

A Standard Bank Home Loan is a traditional home loan for home buyers. This loan is available for natural and juristic persons in South Africa. Standard bank has spiced things up with their home loan offer by using a tier system. Unlike the traditional home loans that maintain the same amount of interest throughout the mortgages lifetime, the Standard bank home loan offers a regressive way of measuring interest on your home loan. That is at certain intervals of your home loan repayment the effective interest on your home loan reduces.

Tiered rates

The tiered rate system works better for the borrower. This method reduces the total sum of the mortgage that you need to pay for your home. The approach comes with these benefits for the borrower:

  • The minimum requirements will reduce whenever the loan amount is recalculated.
  • Monthly instalment recalculation occurs. This will take place when the reduction in repayments is more than 3%.
  • You will save on interest charges on your loan.

The tiered rate is, however, not for every home loan seeker. There are special exclusions and these are,

  • Applicants with more than 40% deposit, building loans, vacant land, development loans and easy sell loans.
  • Loans on behalf of a juristic person.

Both special exclusions are important. The tiered rate system is optional, those who qualify can opt to be part of or not be part of the program.

Credit life insurance

Standard Bank can require home loan holders to get credit life insurance. This is for the purpose of the safeguarding the property in question and the bank’s interest. Should Standard bank ask you to take out a credit life insurance and not comply with the bank, Standard Bank has the right to take out a credit life insurance in your name.

Standard Bank will take out a credit life insurance with a credit life insurer of their choice at your expense. So when required to take a credit life insurance you can either get one with another insurer or Standard bank will do it.

Building Insurance

Building Insurance is compulsory when taking out a home loan from Standard bank. This building loan should be active for the duration of the home loan agreement, that is until you pay off your home loan or forfeit the home loan.

Standard bank reserves the right to ensure the loan property on your behalf, at your own expense and with an insurer nominated by Standard bank, if you do not comply. The building insurance will also have to last for the duration of the loan.

Government Subsidies

Under the Financial Linked Individual Subsidy Program (FLISP), the South African government may grant you a housing subsidy if you qualify. The government will make a lump sum payment towards the cost of your house.

To qualify for FLISP you need to have a joint income of R3501.00 to R22,000.00. FLISP subsidy amount ranges between R30,000.00 to R130,505.00 depending on your monthly income.

The Standard bank will help you get your fair share of FLISP subsidy. If you earn between R3,501.00 to R24300.00 single or jointly and qualify for a home loan, Standard bank can finance up to 100% of your home loan and be able to access FLISP subsidy.

Pension fund backed lending

Those with a pension fund can now get home loans from Standard bank. The Standard bank Pension Backed Lending (PBL) provides affordable home loan guaranteed by your pension fund.

The PBL comes with the following benefits:

  • There are no bond registration costs or delays and no property assessment fees.
  • Can use the PBL loan to buy vacant land, build a house or improve your current home.
  • You can apply for a second loan after paying the first loan for at least 3 months.

3. For home owners

If you are a homeowner and have a home loan with Standard bank, the bank can make special inclusions for you when you settle your home loan or when selling your home, or changing a bondholder.

This is arguably the most important section of the Standard bank home loans as it answers many questions that will affect your home loan in the future. Let’s look at each inclusion that Standard bank has for homeowners.

Paying your bond

This inclusion gives bondholders different opportunities that can make repaying their outstanding home loan easy and affordable. First, it allows the bondholder to opt to repay their home loan through a debit order. This way loan holders won’t skip payments or have their credit record tarnished at the credit bureau.

The second advantage is getting fixed interest rates on your existing home loan. That is if your home loan had a variable interest rate. This option allows for steady monthly repayments regardless of any increase or decrease in repo rate. In the process assuring stable interest rates.

The fixed interest rate option allows for loan holders to ask for an increased interest rate. So if you can’t keep up with interest hikes this option can be what you are looking for. Interest rates are generally fixed for a 24 to 36 months period.

The last option is for making an extra payment to repay your home loan as quickly as possible. This can be done by increasing monthly instalments on your bond account or making lump-sum payments. Your interest on your home loan will decrease by repaying your home loan fast.

Changing bond holder

This category allows for a request for a substitution of a debtor that is to remove or replace a bondholder on a joint home loan. Eligibility is granted on the grounds of a divorce or spouse passing away.

To change a bondholder or to request a substitution of a debtor on a Standard Bank home loan you will need to hire an attorney to handle it for you.

To change bondholder on a joint account, you will need to provide the following documents:

  • The final divorce order and consent papers or settlement agreement,
  • Death certificate, letter of executorship, or last will and statement.
  • A complied substitution of debtor form.

Settling a home loan

With services from the Standard bank home loan division, you will be able to make sound investment decisions with regards to your home. After settling your home loan, you will still need to make a few decisions on what you want to do with your home.

With the help of Standard bank, you will get information on how to go about selling your property after making the final payment or selling your property during an existing home loan. For more information on what to do with your property, you can send an email to Standard bank or call.

Who qualifies for a Standard Bank Home Loan?

The table shows which individuals and entities qualify or don’t qualify for a Standard Bank Home loan.

Description Documents required to applyEligability
Fixed Monthly Income EarnersThe most recent salary pay slip which is not older than 2 months.
Must have proof of residence not older than 3 months.
3 months bank statement if you don’t bank with Standard bank
Yes
Variable income EarnersSix most recent salary payslips which are not older than 2 months.
Must have proof of residence not older than 3 months.
3 months bank statement if you don’t bank with Standard bank
Yes
Fixed Weekly and fortnightly income earnersFour most recent salary payslips.
Must have proof of residence not older than 3 months.
3 months bank statement if you don’t bank with Standard bank
Yes
Variable weekly and fortnightly income earners24 Most recent salary payslips.
Must have proof of residence not older than 3 months.
3 months bank statement if you don’t bank with Standard bank
Yes
Self employed applicantsLatest 2 years business financial statements for a company signed off by an auditor or signed by a registered accountant if a close corporation.
If there are no financials available then one must provide the latest management accounts.
If self-employed but have a personal assets and liability statement, you can provide these but must not be older than 6 months from the date of application.
Yes
TrustsA trust deed Yes
Switching from another institution 12 recent consecutive home loan statements showing all transactions. Yes
Standard bank qualifying applicants

Advantages of the Standard bank home loan

  • Juristic persons can apply for a Standard Bank Home Loan.
  • Have an option to sell your house to another party during the loan term.
  • There is an option of withdrawing from a joint home loan agreement at any time.
  • The Standard bank can fund up to 100% of your home loan including attorney fees and transfer duty.
  • There is no maximum amount for a home loan, therefore, individuals and businesses can apply for any amount of loan that they can afford.
  • Comes with a choice between fixed and variable interest rates.
  • Can settle a loan amount at any time with no additional charges saving on payable interest.
  • There are options for building loan and buying an existing property.
  • Comes with a free consultation with regards to home loan needs.
  • By choosing the Standard bank building loan, you will receive guidance throughout the building of your home from start to finish, in the process you will have a home that complies with South Africa building standards.

Disadvantages of the Standard bank home loan

  • When changing a bondholder on a joint home loan account you will need to reapply. This means that there will be a new credit assessment that will be done with regards to your profile which may lead to higher interest rates or illegibility.
  • As a home loan holder, you will have to foot the entire home insurance bill yet Standard bank and the home loan holder have similar benefits to be property.
  • If you don’t take out a credit life insurance policy within a specified period, Standard bank will take out a credit life insurance policy on your behalf.
  • Juristic entities have to pay more on the Initiation fee than natural persons.
  • The Standard bank may ask for a security of a home loan in terms of collateral. This is conditional and is based on various factors that Standard bank doesn’t openly disclose.
  • During the loss of employment, you still have to make payments to your home loan account.

Standard bank home loan rates 2023

Rate /Fee discription Business rates Personal/individual rates
Initiation fee R13013.16 R6037.50
Monthly service fees R237.50 R5.75
Early termination interest Pro-rata Pro-rata

Conclusion

Obtaining a home loan necessitates careful planning. As a result, obtaining a home loan is not as simple as it appears. Before making your final decision, you should think about a few things. By selecting the Standard bank home loan, you can obtain a custom-tailored home loan. With the assistance of professionals, you can make an informed decision in your best interests.

Standard Bank has been providing home loans for over 150 years, so their services are never in short supply. The bank offers future lending opportunities without jeopardizing the existing home loan agreement. You can save thousands of rands by renegotiating the interest rate on your home loan in the future.

This demonstrates the bank’s system’s adaptability. If you’re seeking for home loan specialists in South Africa, go no further than Standard bank. Prior to applying, ensure that you have all the documentation in order and, most significantly, that your credit report is in the positive.

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