Discovery, in partnership with SA Home Loans, has introduced a home loan offering that incorporates its signature rewards-based approach. Clients have the opportunity to receive up to a 1% interest-rate discount based on their financial behaviour and engagement with Discovery products. But is it worth pursuing?

Discovery has a fairly attractive tagline, direct from their website:

Introducing the first and only shared-value home loan from Discovery Bank. Whether you're a first-time buyer or looking to upgrade, you'll enjoy a full ecosystem of benefits and tailor-made service that starts in minutes in your banking app. Plus, pay up to 1% less on your Discovery Bank Home Loan interest rate, when you manage your money well.

This sounds very appealing, but what does it actually mean in terms of a competitive interest rate?

How Discovery’s Interest Rate & Discounts Work

Discovery’s home loan rates are determined using standard risk criteria, based on SA Home Loans assessment criteria, and approved by an SA Home Loans credit assessor. Therefore, the upfront personalised interest rate referred to is an SA Home Loans interest rate.

However, clients with additional Discovery products can unlock savings through interest-rate discounts. To first qualify, borrowers must have an active Discovery Bank account with Vitality Money.

The total discount depends on:

• Discovery Bank Products: Up to 0.25% discount for holding a qualifying account.
• Vitality Money Status: Up to 0.25% discount based on financial behaviour (Diamond status required for the full benefit).
• Discovery Life and Discovery Insure: Up to 0.5% discount for having related home loan insurance products.

For sectional title property owners, who cannot get Discovery Insure’s building cover, because their building insurance is covered in their levies, the maximum possible discount is 0.875%.

Who can get the full 1% discount?

To achieve a full 1% discount on your SA Home Loans interest rate, borrowers must:

• Have a Discovery Bank Suite or transaction account with bundled fees (0.25% discount).
• Achieve Diamond status on Vitality Money (0.25% discount). This requires earning 80,000 points through financial habits such as saving, budgeting, and meeting asset-value targets.
• Hold both Discovery Life Home Loan Protector and Discovery Insure policies (0.5% discount).

So, essentially only clients with a free-standing home, Diamond Vitality Money status, and all required insurance products qualify for the full 1% discount.

Is a Discovery Home Loan the Right Choice?

For existing Discovery clients with Diamond status, this home loan may be a competitive option for them. However, it’s important to consider all long-term implications:

• Interest rates fluctuate, and maintaining Diamond status for 20 years can be challenging;
• If you manage your money well, it’s likely you’ll be attractive to the other banks as well, and they may even have a better interest rate offering – even with the full 1% discount included;
• By taking out a Discovery / SA Home Loans mortgage, you may be missing out on other great products from the commercial banks – like the 105% costs-included and main-banked concession rates;
• Evaluate Discovery’s insurance and banking products separately to ensure they offer value beyond the potential home loan discount.

If Discovery offers a market-leading base rate and you’re already deeply integrated into their ecosystem, the additional discount can be a great bonus. However, if you must change your financial habits or take on new products just to qualify for the discount, the long-term savings may not be as significant as they appear. Always ensure the deal makes financial sense beyond the promotional benefits.

If you truly want to know where you’re going to get the best home loan offer, you should be submitting your application to multiple lenders to compare, and negotiate, the best interest rate and loan terms.

Get multiple home loan offers through a reputable mortgage broker

A mortgage broker can assist you with multiple submissions to all banks, from a single application on your side. It’s a free service that allows an experienced professional to assist you to structure your application and fight for you when needed, but essentially to take the hassle out of your home loan application.

Phoenix Bonds is a premium finance broker with Consultants all over in South Africa. For a free home loan prequalification, or assistance with an application, click HERE to fill in your details below and a home loan expert will be in touch.