Pension-Backed Home Loan
A pension-backed home loan is when your loan is secured by your retirement fund savings rather than by a mortgage bond.
A pension-backed loan can be used:
- to buy vacant land
- to build a house or improve your current home
- to pay a deposit or pay towards bond registration costs and fees
- to pay off an existing home loan.
How much may you borrow?
- The maximum amount you may borrow is 80% of your after-tax withdrawal benefit.
- The minimum loan is R5 000.
- The loan depends on how much you have saved in your retirement fund and how much you can afford.
Please complete the form together with the supporting documentation and email it to pensionlendingdoc@fnb.co.za
Pros and cons
- You will receive favourable interest rates and fees on your loan, which is negotiated with the Fund.
- Loan repayments are conveniently deducted from your monthly salary.
- If the interest rate changes, your loan term adjusts, rather than your repayment amount (unless you are too close to normal retirement age).
- The maximum loan term is 20 years.
- The loan needs to be repaid by the normal retirement age, as set out by the Fund.
- You must be the property owner.
Financing alternative energy solutions with a pension-backed home loan
- Solar UPS systems.
- Solar domestic geysers.
- Solar pool heating.
- An inverter attached to an electrical board.
- A hybrid system comprising solar panels, an inverter to convert solar DC to AC and lithium batteries to store the energy.