Deposit Savings Calculator
Calculate how long it takes to save your home deposit and how much interest it saves you
Three levels of detail — pick yours
Property price, deposit %, current savings, monthly savings amount — instant time-to-goal estimate.
Savings growth chart, deposit-size comparison table, savings vehicle selector (TFSA, money market, fixed deposit).
Inflation-adjusted target, marginal tax rate on interest, TFSA balance and room, employer housing allowance, 5-year compound breakdown.
Understanding Deposit Savings for a Home Loan Why deposit matters • TFSA • Example
Why Your Deposit Size Matters
A larger deposit reduces your bond amount, lowers your monthly repayment, and signals to banks that you are a lower-risk borrower. South African banks typically require a minimum deposit of 10% of the purchase price, although some lenders will approve 100% bonds for qualifying applicants.
A 20% deposit not only cuts your loan-to-value (LTV) ratio to 80% — it can also secure a better interest rate, sometimes 0.25% to 0.5% below prime, saving tens of thousands in interest over the loan term.
The Compound Growth Formula
Where:
- PV = present value (current savings balance)
- PMT = monthly contribution amount
- r = annual savings interest rate
- n = number of months
The calculator uses this formula to determine how many months are needed until savings reach the deposit target.
Worked Example
Sipho wants to buy a property for R1,200,000 and needs a 10% deposit (R120,000). He currently has R35,000 saved and can put away R4,500/month in a high-interest savings account at 8.5% p.a.
Using compound growth: Sipho needs to save an additional R85,000.
At R4,500/month growing at 8.5% p.a., he reaches his target in approximately 17 months.
If Sipho increased his monthly saving to R6,000, he would reach R120,000 in only 13 months — saving 4 months.
By saving a 20% deposit (R240,000) instead, his bond drops to R960,000 and his monthly repayment at 10.25% over 20 years falls by approximately R2,370/month.
Tax-Free Savings Accounts (TFSA)
South African residents can invest up to R36,000 per tax year in a Tax-Free Savings Account, with a lifetime cap of R500,000. Interest, dividends, and capital gains earned inside a TFSA are exempt from tax — making it the most efficient savings vehicle available for building a home deposit.
If you exceed contributions, SARS levies a 40% penalty on the excess. Always track your annual and lifetime contributions carefully.
Frequently Asked Questions
How much deposit do I need for a home loan in South Africa?
Most South African banks require a minimum deposit of 10% of the purchase price. Some banks offer 100% bonds (no deposit) but these are typically reserved for salaried employees with excellent credit and income stability.
A 20% deposit is recommended — it removes the need for mortgage insurance at some banks, often secures a lower interest rate, and significantly reduces your monthly repayment. Use Tier 1 above to calculate your personalised savings timeline.
What is the best savings vehicle for building a home deposit?
For most South Africans, the optimal strategy is:
- TFSA: First R36,000/year here — all returns are tax-free
- Money market fund: Liquid, higher rate than bank savings (typically 8–9.5% p.a.)
- Fixed deposit: For funds not needed immediately — lock in 9–10.5% p.a. for 12–24 months
Avoid equities for a 1–3 year savings goal — short-term market volatility can destroy years of saving right before you need the money.
Does a bigger deposit really save money in the long run?
Yes — significantly. On a R1,500,000 property at 10.25% over 20 years:
- 10% deposit (R150k): Bond = R1,350,000 → ~R13,330/month → ~R1,999,000 total interest
- 20% deposit (R300k): Bond = R1,200,000 → ~R11,850/month → ~R1,644,000 total interest
The extra R150,000 in deposit saves approximately R355,000 in interest and reduces your monthly payment by R1,480. Use the Deposit vs No Deposit tab in Tier 2 to compare scenarios for your property price.
How does inflation affect my deposit savings target?
South African property prices historically increase at roughly CPI + 1–2% per year. If you are saving for a deposit while property prices rise, your target keeps moving.
The Professional tier calculates your inflation-adjusted deposit target each year. If inflation erodes your purchasing power faster than your savings grow, the calculator flags this and suggests an increased monthly saving amount to stay on track.
Is interest earned on savings taxable in South Africa?
Yes — interest income is taxable above the annual exemption thresholds: R23,800 for taxpayers under 65, and R34,500 for those 65 and older. Interest above these limits is added to taxable income and taxed at your marginal rate.
This is why TFSA savings are particularly powerful for building a deposit — interest inside a TFSA is completely tax-free and does not count toward the exemption limit. The Professional tier models your after-tax effective savings rate based on your marginal tax bracket.