How The National Credit Act Affects Your Home Loan In South Africa

When applying for a home loan in South Africa, there is more to the process than ticking boxes and submitting paperwork. Your application is assessed according to key legislation: the National Credit Act (NCA).

If you are a first-time home buyer or switching your bond, it is worth knowing what the NCA is and how it shapes your journey to homeownership.

What is the National Credit Act?
The National Credit Act (NCA) was introduced to promote responsible lending and borrowing. In simple terms, it helps ensure that:

• You do not take on debt you cannot afford
• Lenders treat you fairly and transparently
• The home loan process is balanced and legally sound

It applies to all credit agreements including personal loans, credit cards and, yes, home loans.

How does the NCA impact your home loan application?
When you apply for a bond, the NCA requires lenders to follow strict checks before approval. These include:

1. Affordability assessment
   This is a deep dive into your monthly income, living expenses, and existing debt. The goal is to ensure you are not taking on more than you can manage.
2. Your credit history
   Your credit score plays a major role in your application. A healthy credit history tells lenders you have handled debt responsibly in the past — and gives them confidence in your ability to repay a bond.
3. Debt-to-income ratio
   This compares how much you earn to how much you owe. If too much of your income is already going toward debt repayments, your home loan may be declined — even if you earn well.
4. Transparent loan terms
   Under the NCA, your lender must clearly explain your repayment amount, interest rate, loan term, and all associated fees. This ensures you understand exactly what you’re committing to.

Why these checks matter
It might feel like a lot of red tape but the NCA is designed to protect you. By making sure you are financially ready, it helps you avoid over-indebtedness and gives you a stronger foundation for long-term financial wellbeing. It also means you are dealing with a lender who is playing by the rules.

Know your rights

The NCA does not just set the rules for lenders. It also protects your rights as a borrower:

• You have the right to apply for credit — and to be treated fairly during the process.
• If your application is declined, you have the right to know why.
• You must receive a written credit agreement that explains all terms clearly.
• You can request a free credit report once a year from a registered credit bureau.
• You have the right to dispute incorrect information on your credit profile.

Preparing to apply for a home loan
If you are getting ready to apply for a home loan in South Africa, here are a few NCA-smart steps to take:

• Get your credit report and clear up any red flags
• Avoid new debt in the months leading up to your application
• Cut down unnecessary spending to improve your affordability
• Start saving for a deposit, even if it is small as it strengthens your application

The National Credit Act shapes how home loans work in South Africa. From affordability checks to credit reviews, it ensures the process is fair, transparent, and sustainable for you as the buyer.
At SA Home Loans, we support the principles of the NCA because we believe in responsible lending. Whether you are buying your first home, switching your bond, or investing in property, we are here to help you make informed, confident decisions.

Ready to get started?
Chat to a consultant today and let’s walk the journey to homeownership together. Contact our team on 0860 2 4 6 8 10 or request a call back today.