Your biggest expenses are transfer costs, transfer duties and bond registration costs. These need to be factored into your calculations.

1. Bond Initiation Fee – The bank approving your home loan will charge you a fee for opening and initiating the bond. This is a fee that is charged in terms of the National Credit Act and may not exceed R6037.50 for individuals. Most lenders are willing to add this fee to the bond amount, but it is wise to rather pay it upfront, instead of ending up paying interest on this amount over 20 years.

2. Insurance Premiums – Having insurance cover on your home loan, offers protection against unexpected events, such as damage to your property or unforeseen financial hardships. Insurance provides a safety net, ensuring you are in a financial position to continue repaying your home loan even if faced with challenges like natural disasters, unexpected accidents or loss of income. Insurance helps to safeguard your home and financial stability.

3. Monthly Service Fee – The lender approving your home loan will charge you a monthly administration fee.

4. Legal Fees – The homebuying process usually involves 3 types of conveyancing attorneys, who will levy a fee for their services – the bond attorney will register your bond and base their fee on the preparation of documents and registering the bond in the Deeds Office. Lenders have brilliant relationships with their conveyancing panels and most of the time pre-negotiate a discount for the fees you will be paying (terms & conditions apply). The transferring attorney will be appointed by the seller, but the homebuyer needs to pay a fee for registering the ownership in his/her name. The bond cancellation attorney will be required to cancel any existing bond/s on the property. It is important to mention that this is a different fee from the 90-day penalty interest that some bondholders charge when a bond is under cancellation.

5. Deeds Office Fee – The Deeds Office charge a fee for registering the bond over the Title Deed. The transferring attorney usually pays this fee and will bill you for it.

6. Transfer Duty – The Transfer Duty is tax that needs to be paid to SARS and is normally the largest cost payable over and above the purchase price of the property. If you should buy from a seller who is VAT registered, e.g., when buying a property in a new development, you will pay VAT instead of Transfer Duty.

7. Moving Costs – Moving into your property is an exciting but pricey moment. Most people require the services of a moving company to move their furnishings into their new home. Avoid any financial stress by doing your research on moving options upfront and budget for packing supplies, hiring movers, renting a moving truck and time off from work.

8. Connecting to Utilities – The owner of a freehold property needs to register at their local authority for water and electricity. When registering a new water & electricity account, usually a deposit is required upfront. Connection to fibre or an Internet Provider might also be a requirement depending on your needs.

9. Rates & Levies – Rates and levies will be dependent on the property type you own and either payable to the local authority or the body corporate. Municipal rates are levied monthly for the services provided by the local authority – refuse removal, sewerage facilities, road maintenance, etc.

10. Security, maintenance & renovations – Depending on the location of your property, the suburb you live in might have security in place, which you will need to make a monthly contribution to. Alternatively, you might decide to contract an armed response company.