South Africa - How Much Can I Borrow?
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How much can I borrow?
When thinking of buying a property in South Africa, you must take into consideration the fact that there are no non-status/self-certification mortgages available. All mortgage applications must be backed up with the bare minimum of; your proof of income, i.e. if employed - copies of your last three month's pay slips and copies of your latest P60/Employer’s Reference combined with copies of your last 6 month’s Personal Bank Statements are necessary. Alternatively if you are self-employed; copies of your last three years Audited Accounts, copies of both your last 12 month's Business and last 6 month’s Personal Bank Statements will be required on application.
It is important to note that, in South Africa the Lenders will NOT take into consideration any proposed Rental Income from the property for mortgage purposes/repayments.
The amount you can borrow is based on your net (not gross) income, i.e. the amount you 'take home' each month. In South Africa your mortgage repayments, combined with any of your other monthly pay outs (such as; bank loans, maintenance, etc.), must not exceed 35% of your monthly income, therefore the amount you can borrow is calculated on an affordability basis.
Example
If your net (joint), monthly income is £1,000, then 35% of this is £350, if you have outwards payments of £50, then this leaves £300 to spend on your, monthly South African mortgage.
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