Affordability Calculator
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FAQS
Frequently Asked Questions
How is affordability calculated for a home loan in South Africa?
Banks typically allow your total monthly debt repayments (including the new bond) to be 30–40% of your gross monthly income, known as the debt-to-income ratio. Your net surplus income (net income minus expenses) must also comfortably cover the bond repayment. Your credit score, existing debts, and employment status all influence the final decision.
What gross income do I need to afford a R1 million home?
As a rough guide, at a 20-year term and current interest rates, you'd typically need a gross monthly income of around R20,000–R25,000 to qualify for a R1 million bond. A larger deposit reduces the loan amount needed and therefore the income required.
Does ooba use net or gross income for affordability?
Banks assess affordability using both. Gross income (before tax) is used to apply the 30% debt-to-income rule. Net income (take-home pay) minus your monthly expenses gives the net surplus, which must be sufficient to cover the monthly bond repayment.
Can I improve my affordability before applying?
Yes. The most effective steps are: pay off short-term debt to reduce your monthly obligations; don't apply for new credit before your bond application; improve your credit score by paying all accounts on time; consider saving a deposit to reduce the loan amount needed; and apply jointly with a partner to combine income.