Pension-backed Lending

Apply for a home loan which is guaranteed by your pension or provident fund.
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Find out how much you qualify for, how you can make repayments, and how fast you can pay off your home loan.

How to qualify

  • You are over 18 years of age
  • You are formally employed and belong to your company pension or provident fund
  • Your pension fund, employer and Standard Bank have a loan scheme arrangement
  • You have a withdrawal benefit of at least R 7 000 in your pension fund (see fund statement)
  • You have been employed at your current employer for at least 1 year
  • You have no administration orders against your salary

Features and benefits

  • Borrow up to the equivalent of 50% of your pension fund withdrawal benefit
  • No bond registration costs or delays
  • No property assessment fees
  • Repayments are conveniently deducted from your salary or wages
  • Option to apply for a second loan after paying the first loan for at least 3 months
  • Option to include Home Loan Protection Plan in event of death, disease, disability or retrenchment

What it costs

  • Interest charged on your loan is linked to the prime lending rate
  • An administration fee of R 16.40 including VAT is charged to the account every month
  • A once-off loan writer fee of R 450 is charged when you apply for a loan. The fund administrator or fund may also charge a handling fee (your loan writer will advise you)
  • Home loan pricing (PDF)
  • Home loan calculators

How to apply

What you'll need

  • Your ID book
  • Proof of home address
  • Latest pay slip
  • Latest 3 months of bank statements (non-Standard Bank customer's only)
  • Proof that you will use the loan for housing purposes (e.g. an offer to purchase property, building quote, building plans)
  • Income and expenditure form

Additional information

How pension-backed lending works

  • Every month you contribute money to the pension fund for your retirement. The fund uses these retirement savings to provide a loan guarantee to Standard Bank
  • A professional loan writer will help you complete your PBL loan application
  • Monthly repayments are deducted from your salary or wages to repay your loan. You receive PBL account statements every quarter
  • The loan needs to be repaid by the time you reach your normal retirement age, or if you leave the fund at an earlier date. If you fail to repay the loan, the fund will use your retirement savings to settle the loan
  • The Pension Funds Act states that pension-backed loans can only be used for housing, in other words:
    • To buy, improve or repair residential property
    • To pay off another home loan
  • You must own the property
  • You and / or your dependents must occupy the property as their normal residence
  • You can further use a PBL loan to buy vacant land, build a house or improve your current home

How much you can borrow

  • The amount you can borrow depends on how much you have saved in the pension fund, and how much you can afford
  • You can borrow up to the equivalent of 50% of your withdrawal benefit in the pension fund
  • Your monthly loan repayments may not exceed 25% of your monthly income after deductions (although your pension fund may set stricter rules)

Important points to remember

  • The maximum loan term is 30 years or normal retirement age, whichever comes first
  • If the prime rate changes your loan term will adjust, rather than your repayment amount  ̶  unless you are too close to normal retirement age
  • You will need to prove that the loan will be used for housing purposes
  • We will ask the fund to settle your loan using your fund savings if you leave your present employer and they stop deductions, or if you are placed under administration order

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