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Exclusions


Building loans will not be granted on

  • Real right portions in any development
  • Share blocks
  • Timeshares
  • Sectional Title developments
  • Non-Residential buildings
  • Fractional Ownership

Loan limitations


  • Owner-builders'
  • 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.
  • 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).
  • You will be limited to the variable interest rate until the building has been completed. On completion of the building
  • 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.
  • 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, a minimum deposit of 10% of the total package price (land + contract amount) is required in all instances; this however could increase dependent on the credit profile score of the applicant(s). The deposit will be based on the lower of the total package price, or FNB's assessed market value on completion.

Understanding the costs involved


Expense Description Amount
Purchase price deposit This is a payment made to secure the property. The amount will be stated in the Offer to Purchase contract Amount varies according to property value
Architect Their fee to design, draw and submit the plans to the local council for approval Architects fees will vary according to the company chosen and design of plans
Builder or contractor The builder will provide you with a contract price which will include building costs, materials, etc. This will also vary according to the design, structure and finishes used.
Industry professionals These professionals may include the use of a quantity surveyor, structural engineer etc. Again, depending on the professional chosen, their fees will vary
Transferring costs A fee that is paid to the attorney nominated by the seller to transfer ownership of the property Amount varies as per the legal conveyancing fees schedule
Transfer duty and VAT This is a government tax, which you will need to pay based on the purchase price or the open market value of the property, whichever is higher. In property sales, either transfer duty or VAT will be applicable depending on whether the seller's line of business is property trading . Transfer duty is not applicable in respect of Tribal land however the transaction may attract VAT, depending on the type of seller. Amount varies as per the legal conveyancing fees schedule

Building Loan


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.

What you get


Your dream home

Build your dream home to your own specifications



Housing developments

Buy a house in selected new residential developments with a choice of design, price and finishes that will suit your needs (excluding Sectional Title units)



Increase the value

Build, alter, redecorate and increase the value of your property



Progress payments

Payout on progress payments controlled by FNB, as per your instruction



Interest charge

Interest is charged on the outstanding balance and not the total loan amount



Process


Consider the exclusions + limits


Get to know the building loan's rules and regulations. We are here to guide you through the entire process of applying for a building loan, and that includes understanding the exclusions and specific loan limits.

 

Pricing


Understanding the costs involved

Expense Description Amount
Purchase price deposit This is a payment made to secure the property. The amount will be stated in the Offer to Purchase contract Amount varies according to property value
Architect Their fee to design, draw and submit the plans to the local council for approval Architects fees will vary according to the company chosen and design of plans
Builder or contractor The builder will provide you with a contract price which will include building costs, materials, etc. This will also vary according to the design, structure and finishes used

Requirements of the builder

  • The bank will require the builder to sign a waiver of lien.
  • The bank would require proof of a Contractor's All Risk Insurance Cover for the duration of the building process until completion.
  • The builder must comply with the bank's conditions, as and when required, and ensure that the project is completed within 12 months from date of registration.

Your responsibilities

  • Inform the builder and the bank of any problems, concerns or delays in the building process. The bank will not act as clerk of works on your behalf and in need, you may want to appoint a suitable qualified professional person to supervise or oversee the project. It is important to note that you have appointed the builder and all disputes are to be discussed directly with the builder and the NHBRC where deemed necessary.
  • Ensure that the contract you sign with the builder does not comprise of conditions which will be prejudicial to you. In need, consult with a legal advisor or a suitably qualified professional to assist you before signing the contract.
  • Request progress payments only if you are satisfied with the progress and the amount requested by the builder
  • Service your interim interest by making regular monthly repayments for these amounts as this will avoid any shortfall that may occur.
  • Ensure that you and your builder understand all the bank's conditions of loan and that all the conditions are being complied with at the times required/stipulated by the bank.
  • Ensure that on completion of the building that your Home Owners Comprehensive Insurance Cover is in place. The Contractor's All Risk Insurance Cover only provides cover from the date when construction commences until date of completion/occupation.

Important points to consider

  • FNB Home Loans will NOT finance 'owner-builders'.
  • Unconventional construction methods will not be considered, unless prior approval is received from the FNB Property Valuations Department.
  • Building operations must commence within 3months after registration of the mortgage and must be completed within a further 9 months thereafter. Building to be complete within 12 months of registration.
  • The building contractor must carry Contractor's All Risk Insurance Cover and proof thereof must be submitted to the bank.
  • A property valuer will inspect the building progress with each progress payment request, and will report to the bank accordingly, prior to any progress payment being made.
  • Interest rates are limited to variable until the building process is complete.
  • Customers may not be granted the Flexi, Re-Advance or Future Use options on their building loan until it has been fully completed and the loan converted into a traditional home loan.
  • It is mandatory that Building Loans interest payments are settled via debit order or salaried stop order, and the responsibility for any interest payments rests with the mortgagor.
  • 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, a minimum deposit of 10% of the total package price (land + contract amount) is required in all instances; this however could increase dependent on the credit profile score of the applicant(s). The deposit will be based on the lower of the total package price, or FNB's assessed market value on completion. If the applicant credit profile score determines a loan to value amount less than 90%, no amount is redeemable at the end of the construction period. If for any reason during the period of construction, the applicant(s) credit profile deteriorates, the bank reserves the right to retain the redeemable amount.

Getting it made easy


Building Loan

How to get it

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