In South Africa, foreigner buyers are referred to as non-resident buyers whether they be natural persons or legal entities whose normal place of residence, domicile or registration is outside the common monetary area of South Africa.

How much can you borrow?

There are certain restrictions on property ownership by foreign nationals. In particular, due to the South African Reserve Bank ruling restricting foreign ownership in South Africa, foreign buyers of property can only borrow up to approximately 50% of the purchase price of the property.

This is a technical area depending on the definitions of the borrowing base so you are best advised to speak directly to a Cape & Country consultant to discuss your individual situation.

However, in general, foreign nationals may borrow R1 locally for every R1 that is introduced to the country. Technically, if a non-resident has consistently brought money into the country over a number of years, they could borrow the same amount.

It is therefore imperative that you keep records of the funds you introduce.

Can you borrow more than 50% Loan to Value?

Cape & Country Mortgages has a number of exclusive agreements whereby we can arrange for off-shore finance in the currency denomination of your choice. In this manner we can increase your borrowing to a maximum of 75% of the purchase price, provided the value of the mortgage exceeds R2m.

All foreign national's mortgages are subject to foreign exchange approval from the South African Reserve Bank. Financial assistance is granted in the form of a loan secured by a mortgage to be registered in favour of the bank granting the loan.

Do I need a South African bank account?

It is advisable, but not entirely necessary for foreign nationals to open a South African bank account. It is possible to set up a monthly debit off your overseas bank account to pay your monthly mortgage repayments. We advise our clients to open a bank account after we have established which bank will offer you the best mortgage deal. This can be very important as some of the bank's mortgage products are only available when you have a bank account with them as well.