There are many extra costs involved in buying a house. The bank where you get a home loan, can help you work out how much these costs will be.

COSTS YOU PAY ONCE

Some of these costs must all be paid at the beginning of your loan. So you will need to have money put aside for them. It could cost thousands of rands.

Deposit: You have to pay a deposit, or down payment, of 5% – 20% of the value of the house before any bank will lend you money.

Valuation fee: The bank will inspect the property to make sure the price you are paying is not too high.

Transfer duty and stamp duty: These are state taxes you pay.

Conveyancing fees (transfer costs) and bond registration fees: These cover the legal costs involved in the transfer of the house into your name and registering a mortgage bond.

Municipal deposits: These are for water and electricity

Internet connections

Removal costs: The cost someone will charge for moving your goods and furniture

COSTS YOU PAY MONTHLY

Monthly repayments on the bond

Insurance on the house: The bank insists that you insure the house against flood, fire or hail damage. The monthly cost of the insurance (the premium) will be added to your monthly bond payments. It is also useful (but not compulsory) to take out insurance on your movable household goods.

Insurance of owner’s life: If you die, the money from the insurance pays off the rest of the bond. This protects the family from losing their home. Banks insist on it because it means they will be paid even if you die. You can also add to the insurance to cover the bond if you should become disabled.

Rates and taxes (also called site rent): You pay this every month or every year to the local authority for road upkeep, rubbish collection, community facilities

Electricity and water: These costs can be prepaid and are not necessarily paid every month.