Blogs
What's New Trending
Switching your bond to another bank: costs and notice
You can move your bond to another bank at any time, but it is not free. You pay to cancel the old bond and to register a new one, and the old bank may charge an early termination charge if you give too little notice. Switching only pays off if the saving on your repayments is bigger than those costs.
How a switch works
A switch is really two transactions. The new bank pays out your old bank, which settles the old bond. A conveyancer (the attorney who handles property transfers and bonds) then cancels the old bond at the Deeds Office and registers the new bond over your home.
The property does not change hands, so there is no transfer duty to pay. You are not buying anything. You are replacing one loan with another.
The new bank will treat you like a fresh applicant. It checks your income, your debts and your credit record, so a switch can be refused if your finances have got worse since you took out the first bond.
What you pay when you switch
- Early termination charge. A mortgage is always a large credit agreement under the National Credit Act. On a large agreement the lender may charge for ending it early. On a loan that is not fixed-rate, the charge is capped at three months of interest, less any notice you gave. With three months’ notice the cap is nil.
- Cancellation attorney’s fee. The attorney who cancels the old bond charges their own fee, separate from the bank’s charge.
- Registration costs for the new bond. These are the attorney’s fee plus the Deeds Office fee, plus VAT at 15% on the attorney’s fee. The Deeds Office fee follows a gazetted schedule that has applied since 27 March 2026. For example, registering a bond of R1 million to R2 million costs R1 738, plus a R52 lodgement fee.
- Bank charges. Ask whether the new bank charges an initiation fee or other fees for the new loan.
Some banks offer to pay or contribute towards these costs to win your business. Ask for this in writing before you commit, and ask which costs it covers.
Notice and timing
The law lets you settle a bond at any time, with or without notice. The common 90 days’ notice comes from the loan agreements banks use, not from the Act. Read your own agreement to see what it says.
The cap on the early termination charge is the reason notice matters. Giving three months’ notice on a non-fixed-rate bond removes the charge, but you will keep paying the old bond during those months. Think about how that overlaps with the new bond before you give notice.
If your bond has a fixed interest rate, the charge works differently. It is capped by a prescribed charge, or by the same method if none is prescribed. Ask your bank to give you the exact figure in writing.
Once the new bond is approved, expect the whole switch to take several weeks. The Deeds Office has to process both the cancellation and the registration.
Is it worth it?
Do a simple sum before you apply. Work out how much less you would pay each month, then divide the total switching costs by that saving. The answer is how many months it takes to break even. If you plan to sell or move in the next year or two, a long break-even period means you will not get your money back.
Here is an example with made-up numbers. If switching saves you R400 a month and the costs come to R12 000, you break even after 30 months. If the costs are R4 000, you break even after 10.
Also compare more than the interest rate. Check whether the new loan keeps features you use, such as an access facility that lets you draw back money you have paid in. Check the term as well. A new bond over 30 years may lower your instalment while costing you more interest overall.
Before you apply elsewhere, it can be worth asking your current bank whether it will lower your rate to keep you. This costs nothing and some banks will agree. Get any new rate in writing.
A bond originator can compare offers from several banks for you. Ask to see their credentials and check with the Property Practitioners Regulatory Authority (PPRA) before you hand over your documents.
What to do next
- Read your current bond agreement for the notice period and any early termination wording.
- Ask your bank for a settlement figure and the charge for ending the bond early.
- Get written quotes from at least two other banks, including who pays the registration costs.
- Work out your break-even point before you commit.
Use the bond repayment calculator to compare instalments, and the interest rate change calculator to see what a different rate does to your repayments. For more on the costs involved, read bond registration costs explained and what a bond originator does.
This article is general information for South African readers, not legal, financial or tax advice. Rules and rates change, so check your own situation with an attorney, your bank or a tax practitioner. Our property calculators can help you work out the numbers.