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Cape Town - Mortgage loans of 100% - in other words for the full value of the home being purchased - are fairly common these days, according to John Loos, household and property sector strategist at FNB.
Based on FNB's deeds data, he estimates this to be the case in 41.5% of total bonds taken by individuals in the second quarter of 2016. This is higher than the 2009 low point, but far down from the 2006 boom time peak, according to Loos. The figure is even higher in the more affordable segments of the market. Of all the loan-to-purchase price ranges 100% 109% home loans are the most common.
A high point of 65% was reached in the second quarter of 2007, for instance, compared to the post-boom low of 25.4% reached in the third quarter of 2009.
"The current percentage of 41.5% is slightly lower than the 43.1% multi-year high reached in the final quarter of 2015, but not sufficiently lower as to draw any conclusions regarding a possible declining trend yet," explained Loos.
Most 100% home loans were made in the average house price range of R358 934 - 49.5% of total mortgage loans do individuals in the second quarter. This is followed by the sector with average house prices of R658 922 (42.2% of its loans).
The lowest dependence on 100% loans is in the most affluent sector with average house prices of R2.442m (22.1% of mortgage loans).
READ: Top trends for home loan approval
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