If you’ve finally reached the point where your home loan is paid off—or you’re selling your property—you’ll soon bump into the term “bond cancellation.”
Many homeowners in South Africa are surprised to learn that paying off your bond is not the end of the story. The bank doesn’t just wave goodbye and hand over your title deed. There’s a formal legal process you still need to go through. And yes, it comes with its own costs and potential headaches.
Here’s what you need to know about cancelling your bond.
What Does Cancelling a Bond Actually Mean?
Think of a bond as a claim the bank has over your property. When you take out a home loan, the bank registers this claim (called a “mortgage bond”) at the Deeds Office.
Even if you’ve paid off every cent, the bond doesn’t just disappear. Until it’s officially cancelled through the Deeds Office, the bank still shows as having an interest in your property. Cancelling the bond wipes their name off your title deed, leaving you with a “clean” property in your name alone.
The Step-by-Step Process
Here’s how it works in practice:
1. Give Your Bank Notice
You need to give your bank 90 days’ written notice that you plan to cancel your bond.
- If you’re selling your property, do this as soon as you put it on the market.
- If you’ve just finished paying off your loan, do it as soon as you know you want the bond cancelled.
👉 If you skip this step, or cancel before the 90 days is up, the bank charges you an early termination penalty.
2. The Bank Appoints an Attorney
Your bank will appoint a bond cancellation attorney (usually from their own panel). You don’t get to pick this lawyer—the bank does.
This attorney will request cancellation figures from the bank, which include:
- Any outstanding balance (if you still owe)
- Accrued interest
- Early termination penalties (if applicable)
- Admin costs
3. Settlement of the Bond
If you’re selling your home, the transfer attorneys will make sure the buyer’s money pays off your bond, covers the cancellation attorney’s fee, and settles any other costs.
If you’ve paid off the bond already and are just cancelling, you’ll need to settle directly with the attorney.
4. Lodgement at the Deeds Office
Once everything is in order, the cancellation attorney takes the paperwork to the Deeds Office.
After registration, the bond is officially cancelled, and the bank no longer has a claim over your property. You’ll then be able to get your clean title deed.
What Does It Cost to Cancel a Bond?
Here’s the part most homeowners don’t love—it isn’t free.
- Attorney’s Fee: Around R5,500 – R6,500 (standard across most banks).
- Deeds Office Fee: A smaller admin charge (varies, but usually a few hundred rand).
- Early Termination Fee: Up to 90 days’ interest if you don’t give notice in time.
- Pro-rata Interest: You may pay interest from when the figures are issued until the bond is actually cancelled.
- Insurance Adjustments: If your home or life cover was linked to your bond repayments, you’ll need to shift those premiums to a normal account to avoid losing cover.
Common Pitfalls to Watch Out For
Cancelling your bond should be straightforward, but here are the mistakes that trip people up:
- Forgetting the 90-day notice: This is the big one. It can cost you thousands in unnecessary penalty fees.
- Thinking “paid off” means “cancelled”: The bond sits on your title deed until formally removed.
- Insurance lapses: If your bank handled your home or life insurance, double-check that cover continues after cancellation.
- Slow Deeds Office turnaround: Registration can take weeks, sometimes longer if there’s a backlog.
Quick FAQ
How long does it take?
Typically 6–8 weeks, depending on the Deeds Office.
Can I choose my own attorney?
No, the bank appoints their own cancellation attorney.
Can the penalty fee be waived?
Sometimes, if you’re moving your bond to another property with the same bank. Otherwise, not really.
Final Tip
If you’re planning to sell—or you’ve just finished paying off your home—get your bond cancellation notice in early. It’s the simplest way to avoid paying extra, and it makes the transfer or payout process much smoother.
Cancelling your bond isn’t complicated, but it can be costly if you don’t know the steps. With a little planning, you can avoid penalties, keep your insurance cover intact, and walk away with a property that’s truly yours—no strings attached.
If you know of anyone who is thinking of selling or buying property in Cape Town, please call me
Lake Properties
083 624 7129
www.lakeproperties.co.za
info@lakeproperties.co.za
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