In South Africa, owning a home is a major milestone — and for many, that journey begins with qualifying for a home loan. While income, credit score, and expenses are the main ingredients banks assess, there’s another factor that plays a bigger role than most people realise: your level of education.

Here’s why having a diploma, degree, or other post-matric qualification can significantly increase your chances of getting that all-important home loan approval.

Banks View Education as a Risk Indicator

South African banks use credit scoring models that factor in not just how much you earn, but how stable and predictable your income is over time. And one of the strongest indicators of long-term income potential and job security? Education level.

People with higher education:

• Tend to earn more over time;
• Are more likely to be formally employed; and
• Are considered lower risk by lenders.

As a result, having a degree or diploma can positively affect your overall credit profile, even if your income isn’t exceptionally high right now.

Higher Education Correlates with Better Credit Behaviour

Multiple studies and financial data show that people with higher levels of education tend to:

• Have better credit scores;
• Manage debt more effectively; and
• Default less often on major financial obligations.

Banks track these patterns, which means you’re statistically more likely to be approved if you’ve completed tertiary education.

Graduates Typically Earn More Over Time

You might not be earning big yet, but banks take a long-term view when it comes to affordability — especially for younger applicants.

Having a higher qualification signals:

• Earning potential that is expected to grow
• Career progression that brings salary increases
• More financial stability, which makes you a safer bet for a 20- or 30-year loan term

Graduate Home Loan Products Exist

Did you know some South African banks offer special home loan packages for graduates?

For example:

• Absa Young Professionals (for applicants under 30 with a degree)
• FNB Youth or Graduate Products
• Investec target market in general

These often allow for:

• Higher loan amounts;
• Lower deposit requirements; and
• Better interest rates.

Why? Because the banks know you’re a lower risk long-term — and they want your business.

What If You Don’t Have a Degree?

Don’t panic. You can still absolutely qualify for a home loan — it just means the bank will look even more closely at:

• Your income history;
• Your expenses and credit obligations; and
• Your employment type and industry.

But if you’re planning further studies or working toward a diploma or degree, know that it can strengthen not just your career, but also your future access to finance.

Final Thoughts

In South Africa’s competitive home loan market, education is more than just a personal achievement — it’s a financial advantage. Banks view graduates as lower-risk, higher-potential clients, and that can tip the scales in your favour when you apply for a bond.

If you’re a recent graduate (or soon-to-be) looking to get into the property market, chat to a mortgage broker who knows how to leverage your profile effectively.

Use a reputable mortgage broker

Using a reputable broker will ensure you get more value out of this free service – including the full-scale service (as outline above), professional advice, utmost confidentiality and respect with your personal information, speedy approvals, competitive rates and priority with banks.

Phoenix Bonds is a premium mortgage broker in South Africa, with a proven track record (check out the reviews on Google).  For expert advice and personalised service, fill in your details HERE and one of our experienced Consultants will be in touch.