Can I borrow to rebuild a home?

2012-09-29 11:59

Letters from our readers this month highlight the need to understand the interest rate on your loan.


sure you always understand exactly how much your debt is costing you,

not only your monthly repayments but how much you will pay over the

whole period of the loan.

It is also important to make informed decisions about whether or not to fix your interest rate

Motlatsi writes:
We have bought a house for R90?000, and we want to demolish and rebuild it from scratch into something better.

This means that we will need to borrow R300?000.

Is this possible?

Maya replies:
A bank will only extend a home loan up to the value of the property, so you need to take out a building loan.

Jeff Lawrence, head of affordable housing at Nedbank, says there is no issue in principle with buying a property that has a house on it, demolishing the house and then building a new house to the new owner’s specifications.

This building loan process has a number of requirements. A building contract should be in place, building plans must be approved and the house must be enrolled with the National Home Builder Registration Council.

Progress payments are made based on completed work.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.