Getting money is the first step in the process of buying a house. You need some savings because you have to pay a deposit of between 5% and 20% of the price of the house before any bank will lend you money. Also, if you qualify you can get a housing subsidy. When you have paid your deposit and worked out what your subsidy will be (if any), you must borrow the rest of the money to buy the house. The money you borrow from a bank is called a mortgage bond or home loan.

Your monthly repayments go towards paying off:

• The lump sum of money you borrow
• The interest (the money that the bank charges you for lending you the lump sum)

Interest rates change over time. If the interest rate goes down this means your repayments will go down. If it goes up, your repayments will go up.

The time over which you pay back the loan is called the ‘redemption period’. It is usually 20 years, but you can pay the money off quicker if you have spare cash.

Banks usually only lend money to people with stable jobs. Most banks insist that your bond repayment is not higher than 25% of your income, or 30% of your joint income if you are married. Banks will also only lend you money to buy a house made with brick or concrete walls, and zinc or asbestos roofing.

(See: Problem 11: Falling behind on bond payments)