A senior man with glasses, a cap, and a beard, smiling while sitting on a couch with three other elderly people in the background.

Pension-Backed Home Loans

An Alternative Path to Property Ownership

A Pension-Backed Home Loan, as provided for under the Pension Funds Act (Sections 19(5)(a) and 37D), offers a unique way to finance a home using your retirement fund savings as collateral, rather than a traditional mortgage bond.

Considering a Home, But Unsure of Loan Approval?

If you are a first-time home buyer or an existing homeowner, a pension-backed loan could be the solution to access finance for housing purposes. That is if you’ve accumulated a sizable retirement fund, it can serve as a guarantee for a home loan, giving you access to housing finance without the need to register a mortgage bond.

Purpose of a Pension-Backed Home Loan

A pension-backed home loan is made possible through an agreement between your pension fund and employer. It allows you to borrow against your retirement savings for housing purposes, whether the property is in an urban or rural area.

You must be the owner or co-owner of the property, or provide proof of ownership of the property. The loan may be used for:

  • Buying vacant land

  • Building a new home

  • Renovating or improving your existing home

  • Paying a deposit on a home

  • Covering bond registration costs and associated fees

A small white house on a grassy area near rocky shoreline, with a hillside and path in the background under a cloudy sky.
A white house with a thatched roof, surrounded by lush greenery and colorful flowers, under a bright blue sky.

Products

No results found

Key Loan Features

Loan Term

  • Up to 30 years, depending on your fund’s specific rules

  • Must be fully repaid by your normal retirement age

Advantages of Pension-Backed Loans

  • Can be used as a deposit alongside a traditional home loan

  • Suitable for buying, building, or improving residential property

  • Favourable interest rates and fees negotiated through your fund

  • Convenient repayment via payroll deduction

  • When interest rates rise, loan terms adjust, not your monthly repayments (unless you're nearing retirement)

Special requirements

Who Qualifies?

Pension-backed housing loans are available to all employees who are members of participating funds, regardless of income level. If your employer and pension fund are part of a participating scheme, you may be eligible.

Loan Amount

  • Based on your retirement savings balance and affordability

  • Subject to the conditions and limits set out by your fund

Limitations to Consider

  • Loan usage is restricted to residential property purposes

  • You must own or co-own the property being financed, or provide proof of ownership of the property if the property is in a rural area

  • Loan must be settled before retirement

  • If you exit the fund or fail to repay, the outstanding loan will be recovered from your retirement savings, possibly leading to tax implications

  • Property and credit life insurance is a requirement

  • Attendance at a financial literacy programme is a requirement

  • Properties will be assessed before the loan is paid out

  • Loans must be used for housing purposes; proof must be provided, e.g. invoices from building suppliers, bond registration and transfer costs or deposit

Six diverse coworkers in a modern office giving each other high fives and smiling.
Person's hands holding a wallet with banknotes in various colors and denominations.

Contact us

Transparency and accountability are at the heart of what we do. Use this page to report an issue, share your experience, or raise a complaint. Every submission helps us create fairer, more responsive service for everyone.