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Saving for your first home? Here are 5 tips

Getting on the property ladder might seem like a distant dream for most of us, but your ability to take this step lies in your own hands.

Married only six months, Aaron and Michelle were already the proud owners of their first home. With wedding, honeymoon and other debt responsibilities, friends wondered how they'd saved to become homeowners.

The hardworking couple went through all the steps to calculate what they could afford, the loan amount they’d be eligible for and the cash they’d need to save. Saving towards a long-term goal with a clear rand target had kept them motivated.

“People often talk themselves out of saving by justifying an immediate spend,” says Rhys Dyer, CEO of ooba, a South African home loan finance facilitator. “Setting a definite goal like owning your first home before you’re 35 will encourage you to save.”

But if you’ve never saved before, how can you get on the property ladder? Ooba gives a few tips:

1. Find out what you can afford

You need to know what you can afford when it comes to property. Use an affordability calculater to determine this, as it will give you clarity on exactly how much you can afford, and in what price brackets you should be house hunting.

2. Save more than the deposit

Remember that transfer and bond registration fees payable to your conveyancing attorneys also need to be settled with cash. Be sure to also save for relocation and moving costs, renovations, and the purchase of appliances and furnishings.

Also, if you can save more than 10% for your first home’s deposit, you’ll be in a position to get a better lending rate from the bank.

3. Set a deadline

How soon do you want to live in a home of your own? Set a target date to keep you motivated and committed to saving.

4. Spend less than two thirds of your salary

As a benchmark, banks generally require a third of your income to be disposable in order to approve a home loan.  If you’re spending more than 66% of your salary, cut down on luxuries and make your current pay cheque work for you.  It’s far more pragmatic than waiting for a promotion or salary increase. 

5. Let someone else do the hard work   

A prequalification certificate from ooba is issued at no cost to a home buyer, but is of very high value.

“An ooba prequalification certificate arms a home buyer with the knowledge of how much they can afford to spend, and the type of bond deal they could expect from a bank.”

This gives them significant negotiation power when looking for their first home, says Dyer. It also starts the application process and gets most of the paperwork out of the way.


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