The moment a bank approves your mortgage bond, it’s easy to feel like the hard part is over. But the truth is, monthly repayments are only part of the story. From bond registration fees and transfer duty to shifting home loan interest rates and lender charges, there are several costs tied to homeownership that don’t always appear on the surface.

Buyers often walk into the process with a clear idea of their deposit and instalments—only to be blindsided by once-off and ongoing expenses that stretch their budgets thin. These aren't small, incidental charges. They can add up to tens of thousands of rands before you’ve even moved in.

Knowing what these costs are, when they apply, and how they affect your bond agreement can help you budget more accurately and avoid financial stress later on.

Hidden Costs in Mortgage Bonds

Securing a home loan comes with more than just monthly repayments. Buyers are often surprised by the once-off and administrative costs that come with finalising the transaction. These charges are often overlooked—but they can have a significant impact on your upfront expenses.

Bond Registration Fees

When a mortgage bond is approved, it must be legally registered at the Deeds Office, giving the lender a formal claim over the property. This process comes with bond registration fees, which are calculated based on the value of the loan.

• The higher your loan amount, the higher your bond registration cost.
• These fees are paid to the Deeds Office and are compulsory for all new mortgage bonds.

Conveyancer Fees

Bond registration can only be completed by a qualified attorney. These legal professionals—called bond attorneys—are appointed by the bank to handle the registration. Their fees are paid by the buyer and can be a significant portion of the upfront costs.

• Although regulated by guidelines, conveyancer fees vary depending on the purchase price and complexity of the transaction.
• This fee is separate from the attorney handling the property transfer, meaning you may be paying two sets of legal costs.

Bond Registration and Transfer Costs

Many buyers are caught off guard by how quickly these legal fees add up. The bond registration and transfer costs combined often exceed what the average buyer budgets for, particularly when added to the deposit, moving costs, and initial instalments.

• These costs are typically due before registration, so the transaction won’t proceed until they are paid in full.
• It’s essential to request a detailed quote upfront so you’re not scrambling to cover unexpected expenses.

Transfer Duty

For properties above R1,100,000, the buyer must pay transfer duty—a government tax based on the value of the property.

• This is not included in your loan amount and must be paid out-of-pocket.
• It’s one of the largest once-off expenses in the property transaction process.

Bank Initiation & Admin Fees

Banks charge a bond initiation fee for setting up the loan, which is either deducted from the loan amount or paid upfront.

• In addition, monthly administration fees may apply for the lifetime of the loan.
• These costs may seem small individually, but over 20–30 years, they add up.

Property Mortgage Insurance

Most banks require homeowners to have property mortgage insurance (also referred to as building insurance) to protect the structure against fire, flood, or damage.

• This is usually a condition of the home loan approval.
• The cost can vary depending on the value and condition of the property and may be added to your monthly bond repayment or handled separately.

These costs can collectively make the difference between an affordable home and one that puts strain on your finances. Knowing about them upfront means you can plan better—and avoid last-minute financial pressure during an already stressful process.

How Interest Rates Affect Affordability

Your monthly bond repayment isn’t fixed in stone—home loan interest rates can shift, and with them, your financial reality. A bond that felt affordable when you signed the offer to purchase can become unmanageable if the interest rate increases just a few percentage points.

Fixed vs. Variable Interest Rates

South African home loans typically come with variable interest rates, which means your repayments rise or fall based on adjustments to the repo rate by the South African Reserve Bank.

• A fixed-rate bond locks in your interest rate for a set period, offering predictability but usually at a higher starting rate.
• A variable-rate bond starts lower but moves up or down depending on market conditions.

Many buyers choose the lower monthly instalment offered by a variable rate, not fully considering how rate hikes could affect them a year or two down the line.

Why Interest Rate Changes Matter Over Time

A change of even 1% in your home loan interest rate can add hundreds or even thousands of rands to your monthly repayment.

• On a R1 million loan, a 1% increase in the interest rate can raise your monthly instalment by over R600.
• Over a 20- or 30-year loan term, that adds up to tens or hundreds of thousands of rands.

Many buyers budget for the first few years of repayments, forgetting that long-term affordability depends on how well they can absorb interest rate fluctuations. When rates go up and household expenses increase across the board, bond repayments are often the first place people feel the pressure.

The ‘Additional Sum’ Clause in Bond Agreements

When a bank approves a mortgage, most buyers assume the bond is registered for the exact loan amount they were granted. But that’s not always the case. In many instances, the bank will register the bond for a larger amount than what was actually borrowed—this is referred to as the “additional sum.”

Why Banks Register Bonds for More Than the Loan Amount

The additional sum gives the lender flexibility to cover legal fees, interest, and potential additional lending in future, all secured under the same bond. For example:

• If you borrow R1.2 million, the bank might register the bond for R1.5 million.
• The extra R300,000 isn’t immediately accessible—it simply gives the lender legal room to recover further costs if the loan goes into default.

What This Means for the Homeowner

While the additional sum isn’t money you owe upfront, it does increase your legal liability.

• If you default, the bank can claim up to the full registered amount, not just what you initially borrowed.
• It may also affect your ability to take out additional loans against the property, as the higher registered bond can limit your available equity.

How It Affects Future Borrowing or Selling

Because the bond is registered for more than the loan amount:

• A future lender may view your property as having less available equity, even if you’ve paid off a large portion of your bond.
• When selling the property, you’ll still need to settle the full registered amount, including any interest or fees accumulated, before the bond can be cancelled.

Many buyers overlook this clause entirely, only realising its impact when they try to refinance, take out a further loan, or sell. It's not just a technicality—it changes the way your debt is viewed, both legally and financially.

Aucamp Attorneys – Property Lawyers and Conveyancing Attorneys

Most people enter into mortgage agreements focused on what they can afford month to month. The fine print—the bond registration costs, the legal liabilities, the additional sums—often goes unnoticed until it becomes a problem. That’s where we step in.

At Aucamp Attorneys, we help homebuyers understand exactly what they’re signing. We don’t skim the surface. We explain the legal implications of your bond agreement, flag potential risks, and make sure you’re not caught off guard by unexpected costs or conditions buried in legal documents.

Contact us if you’re planning to buy property and want legal advice that’s clear, detailed, and always in your best interest.