What's hot
With us a building loan is more than just a loan, you also enjoy a number of benefits to streamline the process and give you peace of mind.
Draft your will today!
Any member of the public over the age of 16 years can now apply for an FNB Will.
A free Will and safe custody for FNB Home Loan and One Account customers.
Terms, conditions and rules apply
As your building progresses, the builder will require payments or reimbursements for completed work. FNB provides controlled progress payouts based on the estimated cost of building work completed and the estimated cost to complete the project.
FNB offers a maximum of six progress payments per build.
As construction work on your dwelling progresses, your builder will require payment / reimbursement for completed construction work.
Benefits
FNB will control payout on progress payments as per your instruction.
Interest and capital is charged on the outstanding balance and not the loan amount.
How it works
FNB will make these progress payments based on the estimated cost of building work completed, the estimated cost to complete the project and after receiving a duly completed and signed progress payment request form from you. Payment will not be made for materials on site or upfront to purchase any materials.
| Expense | Description | Typical amount |
|---|---|---|
| Purchase price deposit (if necessary) | This is a payment made to secure the land. The amount will be stated in the Offer to Purchase contract | 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 |
| NHBRC enrolment fee | This fee is paid by the builder to register the new home being built with the NHBRC which is usually included in his contract price | This fee will vary according to the contract price and ranges between R6 500 and R34 000. Refer to NHBRC website for more details |
| 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 |
| Registration costs | A fee that is paid by you to the attorney | View the rates . |
| Transferring costs | A fee that is paid to the attorney nominated by the seller to transfer ownership of the property | This fee also varies and is based on the purchase price of the property |
| Postage and sundries | The cost of documents and certificates that the conveyancing attorney will need to submit to the Deeds Office, the bank, the estate agent and you | Minimum R300 |
| Deeds Office registry fee | A fixed fee for the local registration of the loan | Estimated cost between R70 and R3 000 |
| Transfer duty | This is a government tax, which you will need to pay based on the purchase price. Transfer duty is payable on transactions which are not subject to VAT, on the acquisition of property by all persons (including close corporations, companies and trusts) | View the rates . |
| Initiation fee | A fee charged by FNB to process your building loan application | See pricing guide for details |
| Service fee | A monthly service fee will be charged on all new registered loans | See pricing guide for details |
| Early termination fees | An early termination fee is charged when a home loan is cancelled without giving 90 days notice. | Waived |
A monthly service fee will be charged on all new registered loans. See Pricing Guide for details.
Other costs to consider
Exclusions
Building loans will not be granted on
NOTE : Local authority approved plans are not a necessity at this stage.
Examples of other certificates which may be available (not applicable in all instances)
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, the bank will require the customer to finance 10% of the total package price (land + contract amount) upfront, in all instances; this however could increase dependent on the credit profile score of the applicant(s). The 10% requirement is based on the bank's assessment of the completed value of the property. If the customer is granted a loan amount with a shortfall (a loan amount of less than the contract price), the customer will be required to complete building to the value of the shortfall amount upfront from his/her pocket. Additionally, the bank will require the builder to build a further 10% of the contract price from his/her funds before any funds will be paid out from the Home Loan account. The final quote will have a condition stipulating this requirement and the customer will be advised of the requirement when final customer contact is made.
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.
The bank will require the customer to finance 10% of the total package price (land + contract amount) upfront, in all instances; this however could increase dependent on the credit profile score of the applicant(s). The 10% requirement is based on the bank's assessment of the completed value of the property. If the customer is granted a loan amount with a shortfall (a loan amount of less than the contract price), the customer will be required to complete building to the value of the shortfall amount upfront from his/her pocket. Additionally, the bank will require the builder to build a further 10% of the contract price from his/her funds before any funds will be paid out from the Home Loan account. The final quote will have a condition stipulating this requirement and the customer will be advised of the requirement when final customer contact is made.
Yes. You will be required to make repayments towards the capital amount as well as the interest during the building period.
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 may apply for a fixed rate.
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.
Progress payments are calculated on the contract amount as the loan amount financed to the customer may not be equal to the total amount required to construct the dwelling.
As progress draws are limited to six payouts, the process must be managed between the builder and the customer.
The builder has to provide Builder's All Risk Insurance over the property until completion; thereafter in terms of your Mortgage Loan Agreement, you will need to provide the bank with suitable home owner's comprehensive insurance that complies with the bank's criteria.
You are going to need Home Owners Cover (HOC). Residential properties are prone to damage from fires, flooding, burst geysers, plumbing and natural disasters. HOC is therefore absolutely essential, as it covers these damages and losses to property.
In terms of our home loan agreement with you, HOC is a requirement. The property remains security of the bank, it is therefore a requirement that you take out adequate cover for the duration of the loan. A suitable HOC insurance is conditional and subject to the bank's approval, irrespective of the underwriting insurer, prior to registration of your bond; and has to be maintained for the duration of the loan agreement. Any insurer may be used as long as the bank's requirements are met within the terms of the policy.
Please note that, should you use an insurer other than the one recommended by the bank, you will be required to provide us with an updated policy following the renewal month of the policy on an annual basis.
Read more about FNB's Home Insurance
Life is full of uncertainties, and no one plans to die and leave their loved ones with a financial burden. In the absence of knowing what the future may hold, you can prevent that your loved ones face additional financial troubles when dealing with your death, as this in itself will be distressing. You may be required to supply Life Cover prior to the registration.
You have the choice of either accepting FNB Life's competitive Life Assurance quote called Mortgage Protection Plan which will cover the outstanding balance of the loan, or you could insure the value of the home loan with an acceptable underwriter, subject to the policy having sufficient cover to pay off the outstanding balance, or registered bond amount, at the time of cession. Please note that FNB can reject any proposed credit insurance if it is not suitable.
Our conditions stipulate that the policy must
Mortgage Protection Plan (MPP)
Where the principle loan amount is equal to or less than R1 000 000, the maximum cover will be capped at R1 000 000 per property, per applicant, with a cumulative maximum of R2 000 000 per applicant. FNB Home Loans will require Life Cover as a condition of the loan being granted on new and further loans for joint or individual applicants.
A competitive quote for applicants aged 64 years or younger from FNB Life, called Mortgage Protection Plan (MPP) will be supplied. There are certain instances where this will not be a requirement, but this will be specified in your conditions of the loan being granted.
The MPP covers the outstanding home loan amount in the event of your untimely death or permanent disability. The premiums payable for MPP are dependent on the previous months average outstanding home loan balance and reduces as the home loan is paid off.
You are however entitled to provide your own policy to be ceded to the Bank, subject to the policy having sufficient cover to pay off the outstanding balance, or registered bond amount, at the time of cession.
| Value of property or bond | Recommended guideline of fees conveyance of immovable property or the registration of a mortgage bond |
|---|---|
| R100 000 or less | R5 000,00 |
| Over R100 000 up to and including R500 000 | R5 000 plus R770 per R50 000 or part thereof above that |
| Over R500 000 up to and including R1 000 000 | R11 160 for the first R500 000 plus R1 540 per R100 000 or part thereof above that |
| Over R1 000 000 up to and including R5 000 000 | R18 860 for the first R1 000 000 plus R1 540 per R200 000 or part thereof above that |
| Over R5 000 000 | R49 660 for the first R5 000 000 plus R1 925 per R500 000 or part thereof above that |
| Value of the property (R) | Rate |
|---|---|
| 0 - 900 000 | 0% |
| 900 001 - 1 250 000 | 3% of the value above R900 000 |
| 1 250 001 - 1 750 000 | R10 500 + 6% of the value above R1 250 000 |
| 1 750 001 - 2 250 000 | R40 500 + 8% of the value above R1 750 000 |
| 2 250 001 - 10 000 000 | R80 500 + 11% of the value above R2 250 000 |
| 10 000 001 and above | R933 000 + 13% of the value above R10 000 000 |
Building Loan
What's hot
With us a building loan is more than just a loan, you also enjoy a number of benefits to streamline the process and give you peace of mind.
How it works
What it costs
When buying or selling property, costs pertaining to registration and transfers need to be considered. Select the applicable link below to have a better understanding of our cost structure and costs involved in finalising the process.
Getting it made easy
