SA Home Loans Funding Model

SA Home Loans pioneered an alternative, non-bank method of funding in South Africa in 2001 which links you directly to the money markets.

Breaking Property Funding Conventions

Historically banks have provided the majority of home loan finance in South Africa. They secure funding from the wholesale money and capital markets which they lend to home buyers against the security of a mortgage bond. For this service they charge fees and a margin on the home loan of approximately 3%.

For the first time in South Africa, and launched by SAHL in 2001, an alternative method of funding was developed to by-pass traditional intermediaries (the banks), and link borrowers directly to the money markets. This non-banking concept is that of securitisation, a globally established means of funding mortgages: in the USA, for instance, almost 40% of all debt is securitised.

SAHL has launched and serviced ten Residential Mortgage Backed Security (“RMBS”) structures over the last five years, with a current collective value of R28 billion. The credit-worthiness of each is fully evaluated by independent rating agencies.

There is absolutely no risk for Home Owners

Properties are registered in the client’s name and are therefore legally owned by the client. The securitisation loan pools are housed in a Special Purpose Vehicle that is ring-fenced and insolvency remote – meaning no risk to home owners.