Top 5 Essential Financial Strategies to Accelerate your path to Homeownership

Top three bullet points

• Favourable Interest Rates: Current interest rates ease financial pressure, making homeownership more accessible for aspiring buyers, according to Gavin Lomberg of ooba Home Loans.
• Government Grants: The First Home Finance grant offers subsidies for first-time buyers earning between R3,500 and R22,000, helping with deposits or home loans.
• Buy-to-Let Strategy: Utilising a buy-to-let approach allows buyers to generate rental income, covering home loan costs while building wealth over time.

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Practical Financial Tips to Fast-Track your Journey to Homeownership

As 2025 unfolds, South Africa is witnessing a shift in the landscape for first-time homebuyers. Despite ongoing financial pressures, this year presents a unique opportunity for those ready to take the leap into homeownership. Gavin Lomberg, CEO of ooba Home Loans, highlights that a favourable interest rate environment is easing financial burdens, making it more feasible for aspiring buyers to achieve their dreams. While saving for a deposit remains crucial, there are additional strategies that can help maximize savings in the long term.

“If planned carefully and correctly, the journey to homeownership can be a rewarding one,” Lomberg states. By employing calculated strategies and seeking guidance from trusted professionals, prospective homeowners can save significantly on their home loans. The journey to ownership is not just about securing a place to live; it’s also about building generational wealth.

Here are five practical strategies to help you save and fast-track your journey to homeownership:

1. Purchase Properties Under the New Transfer Duty Limit

Effective April 1, 2025, the transfer duty exemption threshold will increase from R1.1 million to R1.21 million, offering significant savings for first-time buyers. This adjustment reduces upfront costs and allows more South Africans to pursue homeownership. While transfer duties will still apply, understanding these changes can help buyers better manage their financial planning.

2. Use a Home Loan Comparison Service

Instead of going to just one bank for a home loan, consider using a home loan comparison service like ooba Home Loans. This service negotiates with multiple banks on your behalf, ensuring you get the best possible interest rate. For example, a loan of R1 million at a competitive rate could save you thousands over time. This strategy can lead to lower monthly payments and faster loan repayment.

3. Access the First Home Finance Government Grant

First-time homebuyers earning between R3,500 and R22,000 per month may qualify for the First Home Finance grant. This subsidy can be used toward a home loan or as a deposit, ranging from R30,001 to R130,505 based on income. Eligibility requirements include being a South African citizen, not having previously received the subsidy, and being over 18.

4. Take Advantage of Bank Discounts and Incentives

Major banks in South Africa are competing to attract buyers with special offers and discounts. Homebuyers can benefit from reduced bond registration costs and potentially lower interest rates when switching their primary banking account to the bank that approves their loan. Always explore available incentives to maximize savings.

5. Consider Buy-to-Let as a Property Investment Strategy

For those entering the property market, a buy-to-let approach—often called ‘rentvesting’—can be a smart strategy. This involves purchasing a property to rent out while you continue to rent elsewhere. The rental income can help cover mortgage costs, allowing for potential portfolio expansion and greater financial flexibility in the future.

Conclusion

‍By leveraging these five financial strategies, aspiring homeowners can navigate the path to ownership with greater ease. Whether through capitalizing on government subsidies, securing competitive interest rates, or exploring innovative investment options, the dream of homeownership is becoming increasingly attainable.

With careful planning and the right financial tools, you may find that 2025 is the year you finally achieve your goal of owning a home.

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