Pension-Backed Housing Loan
What is a Pension-Backed Housing Loan?
- The Pension Funds Act empowers pension funds (and provident funds) to furnish guarantees to secure housing loans granted to members by registered third parties (mostly banks).
- Fund-guaranteed housing loans are an important alternative to conventional mortgage lending.
- Determining factors in granting of fund-backed loans for housing are affordability (how much the person can afford to borrow) and accumulated funds in the pension or provident fund.
- The loan, if granted, is not a loan from the pension (or provident fund) but is a loan directly from the bank, to be used only for housing, which is guaranteed by the member’s fund credit / withdrawal benefit.
- The NTRF allows 50% of the available benefit as the collateral guarantee.
- The participating employers who have agreed to offer this facility to their employees support this initiative by allowing direct payroll deductions.
- The current service provider for the Pension-Backed Housing Loan is Standard Bank.
Can all members make use of this facility?
No, only members of employers who have agreed to take up this facility for their employees can use it. Check with your HR to see if this facility is available to you.
What can you use the loan for?
According to the Pension Funds Act, the loan can only be used for housing* by the member and/or spouse or dependent for the following:
- Buying land
- Purchasing a home
- Building a new home
- Renovating an existing home
- Deposit towards a new home loan and
- Paying legal fees for example, transfer costs, bond registration etc.
*The home must be the primary residence of the applicant or their dependent/s.
Required documents when applying for a Fund-Backed Housing loan
- Application form
- Certified copy of South African ID / Passport
- Consent letter from spouse if married in community of property
- Proof of residential address not older than three months
- 3 Consecutive pay slips (if you earn commission or are hourly-paid – last 6 consecutive pay slips)
- Latest retirement fund member benefit statement
- Building plans or building quotations or
- Offer to Purchase if buying a Home or Land
- Bond account details if wanting to pay off an existing bond account
Pension-Backed Housing Loan details - Standard Bank
| Standard Bank Housing Loan | |
| Amount of Loan | Minimum R30 000 or at the maximum of 70% of the members’ Vested Pot, after tax has been deducted (please refer to your latest benefit statement for this information), depending on affordability. |
| Loan Period | Minimum 12-month period and maximum 360 months (30 years) |
| Interest Rate (p.a.) | Standard Bank Prime Interest Rate* less 1.25% |
| Monthly Service Fee | R69.00 per month (VAT inclusive) |
| Once-off Initiation Fee | R530.00 (VAT inclusive) |
*Prime interest rate means the publicly quoted rate of interest as certified by any manager of the Bank in writing as being the prime lending rate at which the Bank lends in South African Rand to its borrowers.
| Standard Bank Housing Loan | |
| Documents | Product Brochure Application Form |
| Call Centre Contact Information | Phone: 086 100 9429 Email: PBLLoanorigination@standardbank.co.za |
