Overview of the Trend
Saving up for a house deposit while also paying transfer costs, bond registration fees and other expenses is getting tougher for many South Africans. Because of this, deposit‑free and low‑cost home loans are becoming a popular way to get onto the property ladder, according to Vermaak Properties.
Why Deposit‑Free Loans Are Rising
The residential property market is shifting. More buyers are choosing 100 % home loans—meaning they don’t need to put any money down upfront—as affordability pressures influence their purchasing decisions.
Data Snapshot
- 56 % of all home loan applications filed in the first four months of 2026 were for 100 % loans, up two points from the previous year.
- Rhys Dyer, CEO of ooba Group, says this shows both a lack of available deposits among buyers and banks’ willingness to support homeownership in a tough economy.
First‑Time Buyers Lead the Charge
- Between January and April 2026, 60.2 % of applications from first‑time buyers were for 100 % loans.
- Demand for low‑cost home loans has jumped from about 3 % of applications in 2021 to almost 16 % in 2026.
Repeat Buyers Join In
- Slower price growth in some areas has cut the equity many homeowners would normally use as a deposit for an upgrade or move.
- As a result, repeat buyers are also turning to 100 % financing.
Approval Rates Stay Strong
- Approval rate for first‑time buyers applying for a 100 % loan rose from 69.2 % in 2016 to 80.9 % in early 2026.
- Approval rate for cost‑inclusive loans reached 88.8 %.
- For repeat buyers, 100 % loan approvals hit 87.5 %, while cost‑inclusive loan approvals climbed to 91.3 %.
What Buyers Need to Know
Even though you don’t need a deposit, banks still check that you can afford the monthly repayments and that you have a healthy credit record.
- Prequalification is a smart first step—it tells you what you can realistically borrow before you start house hunting.
- Most lenders look for a credit score of 661 or higher for no‑money‑down, cost‑inclusive loans.
- Keeping up with repayments and maintaining a good credit profile are essential to stay approved and avoid future problems.
How Banks Are Helping the Market
By offering more 100 % and cost‑inclusive loans, banks are stimulating demand at a time when many potential buyers are priced out. Internal data shows delinquencies remain low and middle‑income household balance sheets are stable, indicating that the screening processes are working well.
While global uncertainties—like conflicts abroad—could make lenders more cautious later, right now South African banks continue to extend these loans to help qualified buyers enter the property market.
Conclusion
The rise of deposit‑free and low‑cost home loans reflects a response to growing affordability challenges. With strong approval rates and responsible lending practices, more South Africans—especially first‑time buyers—can now consider homeownership without needing a large upfront saving. If you have a steady income and a solid credit profile, exploring these loan options could be the next step toward owning your own home.
Remember: a home is a big financial commitment, so get good advice, stay within your budget, and keep your credit healthy. With the right preparation, the dream of owning a place to call your own is more reachable than ever.
