Wednesday, 17 September 2014

FNB and Building Loans 2014

So in the past if you had a building loan of 100% and you paid your deposit of 10% upfront you could get your 10% back when completed but now FNB has changed their mind.  Or so it seems for now.

Is this because they expect an interest rate hike or is this due to results on their loan book thats not that great and they need to show better results - we will wait and see.

In the past customers were granted a a full Building Loan of 100% by FNB and were required to pay a 10%
deposit upfront even though they had the bond,  which would be possible to get paid back upon completion of the building with some FNB based rules attached - well, this offering was known to some as the “Building Loans cash back” offering.  Nice deal!

But that is gone folks.

The cash back offering on Building Loans which allowed qualifying customers to redeem their 10% deposit upon final completion of the building, will be withdrawn by FNB as from 1 October 2014.

So, the FNB rule for Building loans and their Loan Policy will only cater for building loans as follows:

  • Up to 90% LTV for property values up to R 3, 000, 000.00
  • and 85% LTV for property values exceeding R 3, 000, 000.00
But get your mortgage originator to check for you
Be interesting see what Standard bank, ABSA and Nedbank do next.