Question:
How much do I need to earn to qualify for a mortgage of R500 000?

Answer:
The best thing to do is to approach your bank for a pre-assessment. They will examine your current financial situation and tell you what you can realistically afford.

Qualifying for a home loan is not just about how much you earn. You could be earning R100 000 per month, but if you have R95 000 in repayments you will not qualify.

Have a look at your current debt situation. If you have lots of small accounts eating up your resources each month try and settle them before you apply.

The rule of thumb is a family income of about R15 000 per month would qualify for a home loan of R500 000, but this does vary. Such a loan will cost you about R6500 at current interest rates and won’t leave much to live on if you take tax into account.

If you do not qualify at present accept the situation and resolve to start paying off as much debt as possible. Once you have cleared your debt save as much as possible towards a larger deposit. A deposit gives the bank more security and it will reduce the payments and the interest you will have to pay.