In 2026, most South Africans can realistically borrow between three and four times their gross annual income, provided their debt levels and monthly expenses are fully understood and under control. That’s the short and easy answer.

But what buyers expect to qualify for and what banks end up approving are often two very different numbers. Understanding why is critical for originators, property practitioners and buyers alike.

How Banks Assess Borrowing Power

Let’s use a practical example.

If a buyer’s gross income is R45,000 per month (R540,000 per year), a common benchmark is that bond repayments should not exceed ±30% of their gross income. That equates to a monthly instalment of roughly R13,500 per month for this buyer.

At an interest rate of approximately 10.5% over 20 years, that repayment supports a home loan of about R1.2 million. But that’s only the starting point for the calculation and assessment conducted by a bank, as they don’t approve loans based on gross income alone. They assess net affordability, and this is where the numbers often change.

Why Buyers Often Qualify for Less Than Expected

Even in a more stable interest rate environment, banks apply conservative risk assessments to each application received. Prospective homebuyers are evaluated against:

  • Stress-tested interest rates (higher than the current rate)
  • Debt-to-income limits
  • Verified living expenses
  • Credit utilisation and historical repayment behaviour

A buyer who looks strong on paper may qualify for less once all these factors are applied. For property professionals, managing this expectation early prevents possible deal fallout and disappointment later.

How Banks Really Calculate Affordability

Net Income Matters More Than Gross

Using the earlier example with the buyer earning a monthly gross income of R45,000. Their deductions for tax, medical aid and retirement contributions reduce their net income figure to R32,000.

A R13,500 bond repayment would now represent more than 40% of this buyer’s take-home pay, and this is before existing debt is even considered. This is why gross income alone is not a reliable affordability indicator, as this individual would be stretched to pay this amount off if their salary deductions are higher than the industry average.

Existing Debt Reduces Borrowing Power Immediately

Car finance, personal loans, credit cards and store accounts directly reduce borrowing capacity. If the same buyer has, for example, R12,000 in existing monthly debt repayments on their net income of R32,000, they are left with R20,000 before a bond repayment is considered.

Adding a R13,500 bond repayment would push total debt commitments to uncomfortable levels and very likely outside bank thresholds.

In 2026, debt-to-income ratios remain conservative while the market is recovering. Educating potential homebuyers about the benefit of reducing short-term debt to materially improve approval outcomes is key.

Living Expenses Are Closely Scrutinised

Banks now go well beyond declared figures for living expenses and discretionary spend on a home finance application. They can programmatically compare input expenses to statistical benchmarks, analyse an applicant’s bank statements and apply realistic household cost assumptions to make decisions on home loan size and interest rates offered.

As a result, under-declaring expenses no longer works and often leads to declined applications late in the process. While replacing rent with a bond repayment can support affordability, buyers must still account for rates, levies, insurance and maintenance, and banks will calculate whether additional debt is possible on what is left to live on.

Credit Behaviour Influences Both Approval and Pricing

Even buyers with clean payment records may receive more conservative outcomes or higher than anticipated rates if their:

  • Credit cards run consistently near their monthly limits,
  • Utilisation ratios are high, and
  • Transaction patterns indicate financial pressure.

Credit behaviour affects both loan size and the interest rate offered, which directly impacts affordability and if an application is approved or not.

So, What Do You Need to Earn to Buy in 2026?

As a general market guideline:

  • Borrowing power typically sits between three and four times gross annual income.
  • A R1.2 million property usually requires a gross monthly income of R25,000 – R35,000, depending on existing debt, discretionary spend levels and deposit size.
  • Lowering existing debt and having a deposit available to put down against your offer improves outcomes significantly.
  • Dual-income households strengthen applications and allow for costs to be split between partners.

These calculations done on applications vary by bank and individual risk profile, but they provide a realistic benchmark to use as a basis during the house-hunting process.

Affordability is not a barrier, but it should become an upfront filter. Pre-qualification is no longer optional, it’s strategic. When positioned correctly, it empowers buyers rather than limits them. Originators and property practitioners who address affordability at first contact:

  • Reduce time spent on unrealistic property searches
  • Shorten transaction timelines
  • Improve approval success rates
  • Build long-term client trust