Cancellation of Mortgage Bond

Cancellation of Mortgage Bond

Once your home loan is fully paid, you may have the option of keeping the bond facility available to you.

This is important if you need to borrow more money in future. You will not have to incur bond registration

costs again in the future (on the same property in question), as you will not need to register a further

 bond over the property. You may also keep your Homeowner's Insurance and Life Assurance Policies.

You will obviously still have a small monthly payment to make, i.e. Administration Fee, Homeowner's Insurance and Life Assurance.



The process:

You give the bank (or the cancellation attorney, who advises and is chosen by the bank) a written request to cancel

your home loan. The bank will require that you give a 90 Day (3 month) Early Settlement Notice. If you do not comply

with this notice period, you may need to pay a finance charge.


The bank instructs the cancellation attorney to tend to the cancellation, giving the attorney the exact cancellation figure, which includes:

- The month-end balance prior to cancellation figures being issued;

- 90 Days interest.

- The homeowner's insurance premiums that would have been debited to the bond account in the next 6 months, to ensure that the property is covered until transfer takes place.

- The life assurance premiums that would have been debited to the bond account in the next 6 months, to ensure that you are covered until transfer takes place.

- All the legal costs, interest and/or early settlement charges.


The bank furnishes the buyer's bank (who now holds the new bond) with the title deed, once the bond is paid up after cancellation.


A guarantee (promise) is issued, by the registering attorney to your bank, that there are sufficient funds available to cover the bond on the date of cancellation.

The bank issues the consent to cancellation.

If the bank receives more than the amount needed to repa your home loan, it will refund you.


Early Settlement Charges:


If you cancel the home loan, once paid in full, the bank must give you the property's Title Deed it holds as well as any other security documentation. Remember that you will pay a 'Bond Cancellation Fee' to the attorneys to cancel your home loan.

If you cancel the home loan, due to the sale of your property, while still owing on the bond, you have to notify the bank in writing at least 90 days (3 months) in advance. You will also need to stipulate to the bank how you intend to repay the outstanding amount, i.e. with the proceeds from the sale of your home.


For further information contact us on:

Telephone:     087 001 0733

Fax:                086 276 4377

Cell:                082 880 5646

Postal:             Po Box 14382, Hatfield 0028

E-mail:           This email address is being protected from spambots. You need JavaScript enabled to view it.





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Written by Louwrens Koen Thursday, 02 February 2017 Posted in Bond Cancelation , Morgage Bonds South-Africa , Property Transfer Costs , Property Law and Conveyancing