Affordability Calculator

Under the National Credit Act and NCR Regulation 23A, every credit provider must do a formal affordability assessment before granting a loan. That’s not a friendly suggestion — it’s a legal requirement. Lenders have to prove they checked, or they risk reckless-lending claims and forfeiture of the loan.

The assessment compares your gross income against your existing financial obligations plus your necessary expenses, then checks that the proposed new instalment fits within what’s left. The NCR publishes a standardised minimum expenses table — lenders can’t assume you spend less than that.

1. Gross income. Before deductions. Salaried = payslip gross. Self- employed = average of last 3 years’ ITA34 assessments, usually.
2. Discretionary income. What’s left after tax, UIF, pension, medical aid, and statutory minimum expenses. Per NCR R23A, minimum expenses are tiered by income — a higher earner can’t claim they “live on R5k/month” to hide their real spending.
3. Debt service ratio (DSR). Total existing debt instalments (bond, car, cards, personal loans, store accounts) as a % of gross income. Over 50% DSR and most banks decline outright.

If you apply for credit, the lender will impute these minimum monthly expenses unless you can demonstrate lower. They scale with your income tier:

At R40,000/month gross, the NCR assumes you spend at least R5,310/month on non-discretionary expenses (R3,810 + 10% × R15,000). Add your tax, UIF, pension, and medical aid — the banks use this floor, not your actual budget.

Major banks apply two informal caps on top of the NCA’s affordability requirement:

• Bond instalment ≤ 30% of gross monthly income. This is almost universal. A R50,000/month earner qualifies for a bond instalment up to R15,000, which at 11.75% prime over 20 years maps to a bond of ~R1,384,000.
• Total debt service (bond + car + cards + other) ≤ 35–40% of gross. Some banks allow up to 45% for high-income earners with clean credit. Over 50% almost always gets declined.

1. 3 months of bank statements. Proves income is steady and that you don’t have “invisible” debt (regular EFT to a friend for a private loan, etc.).
2. Latest 3 payslips. Confirms employment + salary level.
3. Credit report from XDS, TransUnion, or Experian. Banks pull at least one; the big four pull all three. Looking at: judgments, defaults, account statuses, total instalments, utilisation on revolving credit.
4. Credit score. A composite of payment history, total debt, utilisation, credit age, and new-credit inquiries. 640+ usually passes retail banking; 700+ qualifies for prime rate; under 600 gets declined or offered substantially worse rates.
5. Debt counselling status. If you’re under debt review, you can’t take on new credit until discharged.
6. Affordability declaration. You sign a declaration of income + essential expenses. Lying here is fraud.

• Close unused store accounts. Each open revolving account counts toward your debt capacity, even with zero balance, because the credit limit counts against potential exposure.
• Pay down revolving debt. Credit-card balances at 60%+ utilisation hurt your score AND reduce visible affordability. Drop to under 30% utilisation before applying.
• Settle small personal loans. Not worth keeping R500/month instalments alive for 6 months when you could clear them and free up R500 of DSR capacity.
• Don’t open new accounts in the 6 months before applying. Every new-credit inquiry dings your score briefly.
• If self-employed, maximise declared income. Banks look at net income on your ITA34. Aggressive expense claims that minimise tax also minimise the income banks see.
• Combine spouse income if applying jointly. Two incomes = higher combined affordability. Both parties sign the bond, though, so both are on the hook for the full balance.

Enter your gross monthly income, existing debt instalments, and the expected new commitment (bond instalment or similar). The calculator applies the 30% bond cap, the 35% total-DSR cap, and the NCR R23A minimum-expense schedule to return: (a) whether you qualify at the requested level, (b) maximum bond you’d qualify for, and (c) how much deposit you’d need to close any gap.

These are bank-rule approximations. Individual banks apply their own scoring models on top. The calculator gets you within R5–10k/month of where your actual bank’s pre-approval will land, which is enough to know whether to start house- hunting in the R1m or R3m range.

• NCR — National Credit Regulator
• NCR Regulation 23A — Affordability assessment guidelines
• SARB — Prime lending rate