Capitec announced on tuesday that it has entered the home loans market.
Up until now, the country’s biggest bank by customers has not offered secured lending to finance purchases like homes, even though it has quietly launched “purpose lending” to finance cars through unsecured credit in April this year.
The bank is offering linked interest rates from 6%, one percentage point below prime, which directly compete with the offering of SA’s major banks who have been in the secured lending game for decades.
Although the home loan is branded Capitec Home Loans, it is SA Home Loans, and not Capitec that will assess and approve customers’ application and enter into credit agreements with them.
The bank’s digitally-led home loan offering can finance properties up to R5 million over a period of 30years. The bank said customers simply have to apply online. It promises to complete the process in just 5 minutes. Together with SA Home Loans, the bank is also offering a discount of up to 50% on lawyer fees.
“We’ve continually received requests from both clients and the public asking us to challenge the norms of home loans as we have done with banking,” said Francois Viviers, executive of marketing and communications at Capitec.