[Question] 30% RTI - guideline or legal requirement?

[alphac]

I've recently applied for a first time home loan at several banks. One of the banks replied with a "approved in principal" letter which left me a bit confused and worried. They offered me a fairly high interest rate at a lower repayment period, which pushes my Repayment to Loan value up to 34%.

I was under the impression that the generally talked of 30% RTI limit was legally set. Is this the case, or is it just a general guideline?

[Dave A]

The 30% of income "limit" for home loan repayments is just a general guideline. Ultimately it's all about affordability (being satisfied that you should be able to make the instalments) - and collateral (especially if you've already got assets or annual income exceeding R1 million where much of the more punitive aspects of the NCA fall away).

[alphac]

Interesting, thanks DaveA. I was always under the impression that it was a legal requirement.