Currency fluctuations and South African Reserve Bank regulations make specialist advice essential.

As a potential foreign buyer in South Africa, you should arrange your finances before you even start looking at properties.  Once an offer to purchase has been submitted, the buying process can be very time pressured so it is essential to have your mortgage in place beforehand.

In South Africa, private sales are relatively rare and the property market is dominated by a few estate agencies.  The agent is paid by the vendor and will look after the formalities such as signing the contract or offer to purchase and they will also request legal proceedings on your behalf.  All Contracts or Agreement of Sale to acquire land must be in writing and must be signed by both the buyer and the vendor in order to be valid and legally binding.  Once an Agreement of Sale has been signed by both parties, it is binding and neither party can withdraw without legal consequences with the exception of ‘subject to conditions’ not being met.

Property is commonly advertised at between 10% and 15% above the price the vendor expects to achieve.  Once a purchase price has been agreed with the vendor, a deposit of 10% is typically required.  The transfer of the property is handled by an attorney and registration at the Deeds Office takes six to eight weeks.

Professional legal & accounting advice should be sought to protect your own interests.

We have access to ten of the leading lending institutions in South Africa.

In most cases, non-residents in South Africa may borrow a maximum of 50% of the purchase price.  Baydonhill International Mortgages has secured exclusive arrangements with high-profile lenders and, on a case by case basis, a maximum borrowing of 75% of the purchase price can be considered.

Mortgages are only available to individuals, companies and trusts purchasing residential property for their own use and holiday lettings.  The minimum loan amount available is £30,000.

Mortgage products are available on a repayment and interest only basis.  Various mortgage options, such as future choice mortgages and building bonds, can be arranged.

Loans can be arranged in South African Rand or Sterling. US Dollar loans are available for a minimum of £150,000.

The interest rate is based on the Prime Overdraft Rate.  Mortgages can be arranged to a maximum term of 30 years but the most common term is 20 years.  Life assurance is assessed on a case by case basis although it is strongly recommended that you take out life cover for the loan even if this is not a mandatory requirement of the lender.

Eligibility is assessed on your credit history.

Transfer Duty - This is charged at approximately 5% - 8% of the purchase price depending on the value of the property.

Legal Fees- Approximately 1% - 2%, depending on the value of the property.

Stamp Duty - Approximately 0.2% of the mortgage amount.

Bank Valuation & Arrangement Fee - Inspection fees are approximately 0.2% of the valuation.  The arrangement fee varies between 0.5% - 1.5% of the loan amount.