From the beginning of April 1998, First National Bank (FNB) joins the other major banks in charging you a R5,70 administration fee on your home loan.
Personal Finance has calculated that if you have taken out a R100 000 loan over 20 years, at the end of the period you would have forked out more than R1 300 extra, thanks to this additional charge.
The effect of this charge is even greater, because if you put this money to better use by paying off R5,70 a month in addition to your minimum monthly loan repayment, you would save yourself more than R12 300 over the loan period.
Also, it would mean that you could pay off your home loan eight months earlier.
FNB is the last of the major lenders to introduce this fee.
In a letter to its customers, FNB says FNB Properties has resisted introducing the charge for a long time but that "rising costs have now compelled us to follow".
The charge is effective from the beginning of April.
Ann Bramhill, FNB's spokeswoman, says the bank has tried hard to absorb the costs over the years.
However, the bank obviously anticipated introducing this fee for some time before actually doing so, because in a letter of grant for a home loan taken out more than a year ago, it is stated that the bank reserves the right to levy a monthly administration fee plus VAT, in addition to the instalment, and at the maximum amount permissible under the Usury Act. This maximum is R5.
Alistair Ruiters, the Usury Act Registrar at the Department of Trade and Industry (DTI), says the act does allow for banks to charge an admin fee.
At present the act is being redrafted and one of the issues being looked at is that of the additional fees that you are charged over and above your monthly bond repayment, "which can be very confusing to consumers".
Ruiters says the admin fee was introduced in the 1980s and was aimed at low-cost housing loans, because people in this group posed a higher lending risk to banks and the loan was therefore more work to administer. But since then, banks have slapped this fee on all their home loan customers and are eager to charge you more.
The DTI has been approached by both consumers and the banks to change the fee. Consumers are calling for its scrapping and banks have asked the department to increase it, to keep up, they say, with rising costs.
Erik Larsen, a Standard Bank spokesman, says the bank has been charging its fee since 1995.
In the ABSA group, Allied Bank was the first to introduce an admin fee of R5,70 (inclusive of VAT). Since then, Volkskas, United and Trust Bank have all instituted the same fee.
Nedcor introduced its fee in December 1996. It pointed out at the time that there was no possibility of discounting or waiving it.