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100% bonds account of 42.9% of new mortgages

So Turquoise --1 - CopyAverage loan-to-purchase price recorded 88.5% in Q4 2016. This means, across the entire market using deeds office data for natural persons applying for mortgage finance, 11.5% of the purchase price was not supplied by the bank.

The 100% bond, however, is more common than many may think. According to John Loos, FNB’s household and property sector strategist, 100% and above bonds make up “a significant 42.9% of total bonds”.

“The 100% to 104% LTP band was estimated at 38.2% of the total number of bonds identified in Q4 2016,” said Loos. “In the 105% to 109% LTP group of bonds makes up 4.7% of the total – this percentage has risen noticeably from 2.9% of total bonds registered at the beginning of 2016.”

Why you should not ask for a 100% bond

Number of bonds

9,593 bonds – 100% to 104% LTP ratio bonds in Q3 2016

1,056 bonds – 105% to 109% LTP category in Q3 2016


Review overview