The country's first home loan discounter, SA Home Loans (SAHL), is looking at introducing a fixed interest rate to allow you to peg your interest rate at an appropriate time.
Simon Stockley, chief executive of SAHL, says his company will be introducing the fixed rate option when the interest rate cycle bottoms out.
At present, a loan from SAHL will cost you 16,1 percent. The interest rate for all borrowers is based on the SAFEX (SA Futures Exchange) Bankers Acceptance (BA) rate, published in newspapers daily, plus a margin of 2,1 percent. The BA rate can fluctuate daily.
The company is offering loans over 20 years. There is no penalty for paying off the loan earlier.
The main qualifying criteria are that your loan be R100 000 or more and that you have a 30 percent deposit, or have paid off 30 percent of your existing loan.
SAHL is able to offer discounted loans due to a lower overhead structure than banks and through a funding mechanism called securitisation, in which loans are pooled and sold to institutional investors.
SAHL registered its first mortgage bond seven weeks after its first loan application.
"The challenge now is to cope with the overwhelming response we've received since we launched and to reduce turnaround and processing time to six weeks," Stockley says.
The company operates through sales centres in Johannesburg, Pretoria and Cape Town. Its head office and administration centre is in Durban.
Additional offices will be opened in Port Elizabeth, East London, the Garden Route and Bloemfontein by July.
So far, the company has received applications for more than R380 million, from over 1 500 prospective borrowers, and applications continue to stream in at a rate of about 50 a day.
"Clearly the consumer is demanding choice and a more competitive price, with regard to financing options," Stockley says.