Simon Stockley, who revolutionised the home loan industry in South Africa with the creation of SA Homeloans five years ago, has returned to South Africa after a stint in Saudi Arabia, bringing to market another mortgage lender with some interesting products.
Integer, which launched this week, is an independent mortgage provider set to take on the big four banks with a bank account-linked mortgage, a capital deferment product and faster turnaround times.
Ian Wason of mortgage brokers Bond Busters says the South African market is ready for a more “savvy” home loan company.
The capital deferment product, which is well established in the United Kingdom, sees the home- owner paying off only the interest portion in the first two years. The idea is that a young professional wants to get a foot in the housing market but may struggle initially because of high property prices. Within two years the professional’s salary will have increased substantially and he or she would now be able to afford the full bond payment. If, instead, they waited those two years, property prices — even at a reasonably moderate 14% growth — would now be almost 30% more expensive.
Service is one of Integer’s other selling points. While industry norms for home loan approval are about five to seven days, Stockley aims to achieve credit approval within 48 hours. Customers also have the option to link home loan accounts to debit cards.
Interest rates are competitive — 1% or 2% below prime depending on the applicant. The target market is for home loans between R400Â 000 and R2,5-million and Integer provides loans of up to 85% of the value of the home. Stockley says this lowers the risk of the book and makes it more attractive for investors.
Virgin Money will be coming to market shortly with a home loan offering expected to focus on costs, especially legal fees.
Sanlam has also been making its mark with its home loan product.