Goodbye lease, hello legacy: the benefits of homeownership

Published May 2025

Article insights:

Buying your own home is more than just a financial investment, it is also a life-changing milestone that opens up a world of possibilities to you as a homeowner, says Bradd Bendall, BetterBond’s National Head of Sales. 

Despite geopolitical instability and last year’s interest rate hikes, South Africa’s property market is holding steady and even showing signs of improvement. Although still in double digits, the current prime lending rate has not deterred homebuyers. BetterBond’s April Property Brief reports a 7.7% quarter-on-quarter increase in home loan activity, and a 9.3% improvement year on year. This shows that the housing market has gained renewed traction this year.

For many, the decision to rent or buy hinges on affordability and life stage. However, the benefits of homeownership are becoming more accessible, with banks offering 100% plus bonds and an increased transfer duty threshold of R1.21 million. Here's why buying your own home could be more rewarding than renting:

Peace of mind

While there is some flexibility in having a one- or two-year lease agreement that can be changed or terminated, instead of a 20-year bond, the trade-off is the possibility that your landlord may decide to sell at any stage, says Bendall. “You may have envisioned living in your home for two years or so, but then the landlord unexpectedly notifies you of an intention to sell or increase the rent. One of the benefits of homeownership include having the peace of mind knowing that no one can ask you to leave if their circumstances change.

Creative freedom

When you rent a property, there’s often strict rules on how it should be maintained. You may not be allowed to keep a pet, for example. You may need permission to change the paint colours of the walls or to install a safety gate around the swimming pool. However, with your own home, you have a blank canvas that you can decorate and renovate as you see fit. “The added advantage of this creative licence is that money spent on home improvements could have a positive impact on your investment. The average return on investment for a home renovation can be up to 80%,” adds Bendall.

Predictability 

If you have opted for a bond with a fixed interest rate, you will know exactly how much you have to pay toward your bond. Even with a variable bond that is affected by changes in the prime lending rate, you have a good idea of what you will be expected to pay over your loan repayment period. “With this in mind, make sure you know how much you can realistically afford to pay on a bond each month. This should be based on your monthly income and household expenses," advises Bendall. If cost is a consideration, start small, he adds. “Rather invest less than what you can afford, to minimise risk and make the most gains possible.” Remember too that although your bond repayments are fixed, you can reduce the interest payable by paying extra into your bond when possible. 

It's advisable to apply for bond pre-approval before you even start looking at properties because this process includes a credit check. Banks will consider a bond applicant's credit score when reviewing an application. Applying for a pre-approval not only accelerates the bond application process. It also boosts your chances of approval when you are ready to apply for a bond. “BetterBond’s clients who pre-approve first have a 95% approval rate on all applications submitted to banks on their behalf.” 

As a tenant, you will be at the mercy of a landlord who can increase the rent every 12 months. Rental inflation is usually between 8% and 10%, says Bendall. “While your bond payment changes with the changes in the prime lending rate, it won’t increase annually like rental costs do. You should also factor interest rate changes into your bond calculations when applying for bond pre-approval, before putting in an offer to purchase your new home. “By working with a bond originator who will apply to multiple banks to secure the most competitive prime lending rate, it is possible to plan and budget wisely before buying a property. You could end up paying less each month than you would have if you were still renting a home.”

Return on investment

Unlike other purchases that often depreciate in value, the minute you sign on the dotted line, your home should appreciate in value, says Bendall. “Buying a home is a long-term investment that not only provides financial security. It also offers a springboard to your next investment.” The longer you own a property, the more it will be worth. “Instead of paying rent that benefits someone else, your bond repayments build equity in your growing asset. Each payment is a step closer to full ownership and future financial freedom.”

Improved credit score

As the bond application process includes thorough credit checks, buying a home is a good way of establishing your credit score. By paying your bond consistently over several months, you will also prove to your financial institution that you are intent on repaying the loan, and your credit score could improve. 

Access to equity

If you keep up with your bond payments, your home loan can be a source of equity for home improvements or other investments, says Bendall. A rental property does not offer the same financial benefits. “Remember that every monthly bond payment reduces the amount you owe, increasing your share of the property. When you have built up enough equity you can apply to access it as a second bond.” You can use this money for other investments, education costs, debt relief or emergency expenses. 

Tax benefits

Although there are no tax benefits for owning a primary residence, you will benefit from some deductions if you own a rental property, says Bendall. As a landlord you can deduct certain expenses related to the management of the property. These include the costs of repairs and maintenance, municipal rates and taxes, insurance premiums for policies covering the rental property, property management fees and interest on your loan. 

Better insurance

As a homeowner, you have access to building insurance that offers protection against fire, storm or flood damage, theft or vandalism and other structural damages. You can also cover the contents of your home against risk, says Bendall. However, as a tenant, you can only cover your personal belongings. The landlord is responsible for building insurance, which means you have little control over how much cover you have. 

Additional income

If you own and rent a home, the income you make from it can service at least a part of your bond. With a rental property, however, the money you pay each month goes towards servicing someone else’s bond. There's no opportunity to generate additional income, says Bendall. A home is also a source of generational wealth, explains Bendall. “Once the home is paid off, you can leave it to someone in your family to live in or sell as an asset that can contribute to the purchase of their first home.”

An inflation buffer

One of the more important benefits of homeownership is that real estate values tend to appreciate in value, often at a rate that outpaces inflation, says Bendall. As reported in BetterBond’s April Property Brief, house prices have increased at an average annual rate of 5.7% for all buyers and 6.1% for first-time buyers since the first quarter of 2020. This is considerably higher than the current inflation rate of 2.7% (as of 11 May 2025). 

A place to call home

The physical and emotional security that comes with benefits of homeownership has a positive impact on your mental health as well, says Bendall. “Owning a home provides a sense of belonging that you won’t get as a tenant.” While renting offers flexibility, buying a home provides financial stability and personal freedom. This year could be your best year - especially if you stick to these financial resolutions, concludes Bendall.