First National Bank Home Loans
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The FNB Home Loan
RMB certainly got a caning from the investor community when they released their interim results on the 4th of March for not meeting their financial targets. Not that the bank’s performance was bad: they posted a 12% normalised earnings growth and a credible normalised return on equity of 26%. First National Bank or FNB, which is RMB’s banking business, reported earnings growth of 25%.
FNB, who conceded a sizable chunk of their home loan market share over the past 18 months, appears to have every intention of clawing it back. They have already embarked on an initiative to re-engineer their back office - both to improve service delivery and to reduce cost. In addition, they revisited their credit provisioning and are in the process of redefining it.
As a prospective customer you may subsequently find FNB more approachable than usual if you are busy shopping for a home loan. They have five home loan products on offer. Two of these are aimed at the purchase of primary residences:
Traditional Home Loan
Bond Plus
Traditional Home Loan
The Traditional Home Loan is just that: Traditional. It is designed for prospective homeowners who, when buying an existing property, have sufficient cash with which to pay a deposit and the upfront registration and transfer costs.
Features and Benefits
Some of the features and benefits of Traditional Home Loan include:
Loan Term
Loan terms of up to 30 years are granted.
Financing
Financing is normally provided for up to 80% of the purchase price.
Presents you with a choice between 12-, 18- or 24 months fixed interest rates, variable interest rates and BA-linked interest rates.
Access to the Future Use option. Future Use allows the registration of a mortgage that is greater than the home loan you secured.
Access to Further Bond. Further Bond allows the registration of an amount of money additional to your current, registered mortgage.
Access to Re-Advance. Re-Advance allows you to access the money you have already paid off against your home loan.
Transacting
Additional deposits are allowed at any time. By making additional deposits, you save on interest.
You can also apply for Flexi Bond, which is an add-on that allows you to access the additional deposits you make into your home loan account.
Qualifying criteria
To qualify for Traditional Home Loan, the property must be valued at R 300,000 or more. You will also need to meet FNB’s credit requirements and possess a valid South African Identification Document.
Comment
Insurance is compulsory if you qualify for Traditional Home Loan.
Bond Plus
Bond Plus is designed for first time home buyers who do not have the cash to pay the upfront registration and transfer costs of a property.
Features and Benefits
Some of the features and benefits of Bond Plus includes:
Loan Term
Loan terms of up to 30 years are granted.
Financing
Financing is provided to cover 100% of the purchase price plus 8% for transfer and registration costs.
Choose between a fixed 12-, 18- pr 24 month interest rate and a variable interest rate.
Transacting
Mortgage repayment is either by debit order or by stop order.
Access to the Future Use option. Future Use allows the registration of a mortgage that is greater than the home loan you secured.
Access to Further Bond. Further Bond allows the registration of an amount of money additional to your current, registered mortgage.
Access to Re-Advance. Re-Advance allows you to access the money you have already paid off against your home loan.
Qualifying criteria
To qualify for Bond Plus, you need to be a South African citizen, earn a single or joint income of R 10,000 or more per month, meet Standard Bank’s credit requirements and be 49 years or younger of age.
Comment
Bond Plus only applies to primary residential properties with a value of between R 300,000 and R 2 million. The minimum mortgage amount is R 240,000.
