Home loan approval rate rises

According to the latest statistics from BetterBond Home Loans, which is SA’s biggest mortgage origination group, its home loan approval rate has topped 80% in the past month – the highest level reached since 2009.

The September figures also show a 30% year-on-year increase in the value of home loan approvals achieved by BetterBond, to R1,7 billion a month, says CEO Shaun Rademeyer.

“This is partly a function of the increase in the average home price, which our figures show has risen 9,8% in the year to end-September, but also an indication of the effectiveness of mortgage originators, who not only provide potential borrowers with a comparison of the various borrowing options on offer at any particular time, but will also motivate their applications individually and submit them to several different banks if necessary.

“It is worth noting that although the initial decline rate appears to be dropping at the moment, more than half of the home loan approvals that we have achieved over the past year have only been achieved on submission of the application to a second or even third lender.

“Also, the percentage of applications turned down by our client’s own banks and then approved by a different bank has risen from 13% to 15% in the past 12 months.”

Meanwhile the statistics show a 13% year-on-year increase in September in the average size of bonds approved for those who obtained their home loans through BetterBond, and an average decline of 2,4% in the size of the deposit required (see table below).

Table stats

The average purchase price paid by first-time buyers rose 5,1% year-on-year to R658 516, while the average approved bond size for such buyers rose 6,7%.

However the size of the average deposit required by first-time buyers rose 11,5%, so it was fortunate that the percentage of loans granted for 100% of the purchase price increased year-on-year from 33% to 38%. Most 100% home loans are granted to first-time buyers who fall into the “affordable” or “gap market” category.

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About BetterLife Home Loans

Since 2003 BetterLife Home Loans has been SA’s No.1 Bond Originator, handling the entire home loan application process on your behalf – free of charge! Our aim is still to source the best interest rate for you by submitting your home loan application to all the major banks. There is no easier way to apply for a Bond or Home Loan in South Africa!

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