Over 10% increase in bond applications over two years signals economic recovery

The number of bond applications increased by 10.4% over the past two years. 

This was a clear indication that the negative effects of record-high interest rates in 2023 and 2024 are starting to dissipate, says Stephan Potgieter, CEO at bond originator BetterBond.

According to data from BetterBond’s February 2026 Property Brief, compared with data from January 2024, home loan application volumes have increased by 2.8% this year, notwithstanding the predictable decline in activity experienced over the festive period and holiday season.

Several macro-economic indicators suggest South Africa is on track for a bumper year.

“Data from BetterBond’s latest (February 2026) Property Brief points to conditions supportive of another cut in the prime lending rate in March,” says Potgieter.

He notes that the rand’s performance has made it the "talk of the town", adding: “A strong currency helps keep inflation in check, which in turn could see the Reserve Bank continue with its rate-cutting cycle.” 

FNB also notes in its latest Property Barometer that market conditions have shifted from supply-led price resilience to gradually improving, broad-based demand.

Stronger appetite for lending

The bond originator says improved market access has pushed the national home loan approval ratio to 63.5%, a 3.8% year-on-year increase. "With improved affordability and better payment records, banks have been more likely to approve bonds in recent months," says Potgieter. 

This trend is most visible in Pretoria and the Western Cape, which boast approval ratios of 73.3% and 70.4%, respectively.

Lower deposits

While Potgieter says the downward trajectory in deposit requirements for home loans has slowed since the introduction of a new inflation target range, BetterBond’s data shows that homebuyers are still paying less on their deposits than they did two years ago.

Deposit requirements for all buyers have dropped by 9.2% and by 10% for first-time buyers. Affordability and market participation are also supported by the increase in homebuyers’ incomes over the past four years.

SA consumer debt

Debt levels vary significantly across income bands for an average South African consumer, René Moonsamy, who is the new chairperson of the National Debt Counselling Association (NDCA), recently told "Independent Media Property". 

In the lower-income band, the average consumer tends to carry heavy unsecured debt. This includes payday or short-term loans, retail store accounts for clothing and furniture, and revolving credit facilities.

These debts often accumulate quickly because they are used to cover discretionary spending and living expenses.

In the middle-income band, we see credit cards, personal term loans (typically repaid over two to four years), and vehicle financing. These consumers often use credit to supplement income shortfalls or manage rising household costs.

In the higher income bands, mortgage bonds, vehicle finance, credit cards, and structured loans are more common. While asset-backed debt can be productive, it still places considerable pressure on monthly affordability.

The NDCA says the lowest debt levels can fall below R15 000 in total outstanding debt, while the highest can exceed several million rand where home loans and multiple facilities are involved. “What remains consistent across all bands is that debt becomes problematic when instalments consume too much of monthly income.” 

Impact of credit score on bond application

An individual’s credit score plays a major role in determining whether they will be approved for a bond or home loan, says BetterBond. It says the higher the score, the better the chances of approval, as banks assess how reliably an applicant has honoured past financial commitments over time.

“Even a late or missed payment of as little as R100 can negatively affect a credit score and remain on a credit record for several years.”

Credit behaviour and interest rate offer 

Credit behaviour also influences the interest rate offered by a bank, Potgieter adds. He says applicants with strong credit profiles are often rewarded with more competitive interest rates, sometimes even below the prime lending rate.

“Over the life of a home loan, a lower interest rate can translate into substantial savings on monthly repayments and total interest paid.” 

Debt-to-income ratios

In addition to credit scores, the CEO says banks closely examine an applicant’s debt-to-income ratio.

“This compares total monthly debt repayments, including car finance, credit cards, store cards and personal loans, to gross monthly income.

“If an applicant is already heavily indebted, a bank may determine that they are financially stretched and unable to comfortably afford an additional bond repayment.” 

It is also important to understand the difference between “good debt” and “bad debt”, as this forms part of a bank’s overall affordability assessment, Potgieter says. 

Independent Media Property