When is a Building Loan shortfall likely to occur?

Author
MyProperty Namibia
Namibia's #1 independent property portal

If the tender amount by the builder reflects a realistic or market-related construction cost to build your dwelling then the occurrence of a shortfall will be highly unlikely. However if the loan amount approved or required is less than the tender amount, any difference between the loan amount and the tender will have to be paid by the customer from their own funds upfront towards construction progress or the purchase of the land; before the bank will allow any advances from the loan amount. If the tender amount is totally insufficient in relation to a realistic market-related cost to build the dwelling the bank will most probably decline the application upfront or request that the customer supply the bank with another more realistic tender.

A shortfall may occur in the following instances:

  • when the bank's estimated construction cost of what it will take to complete the building is higher than the contract price quoted by the builder
  • when the loan applied for by the customer is less than the contract price
  • due to a combination of the above
Home Loans Property News
Bank of Namibia Holds Repo Rate at 6.75% to Support Currency Peg and Economic Growth
Market
Bank of Namibia Holds Repo Rate at 6.75% to Support Currency Peg and Economic Growth
19 Jun 2025
The Bank of Namibia has once again opted to keep its main interest rate steady at 6.75%, marking the second consecutive meeting without a change to the repo rate. The decision, announced after the Monetary Policy Committee’s (MPC) bi-monthly meeting held on 16–17 June 2025, reflects the central bank’s cautious approach amid persistent global uncertainties and a still-recovering domestic economy.
read more
Avoiding common first-time buyer regrets
Buyers
Avoiding common first-time buyer regrets
13 Jun 2025
Buying your first home in Namibia is an exciting milestone and the beginning of what should be a rewarding chapter in your life. But for many first-time buyers, the journey comes with unexpected challenges and, in hindsight, a few regrets.
read more
Unlocking the power of home equity
home owners
Unlocking the power of home equity
04 Jun 2025
For many home buyers in Namibia, the main focus is on creating a home, often overlooking the investment potential beyond knowing that real estate generally appreciates over time. However, understanding and leveraging your property’s equity can be transformative, helping you manage finances, invest in home improvements, and build wealth.
read more
The questions you need to ask yourself before applying for a home loan
Buyers
The questions you need to ask yourself before applying for a home loan
15 May 2025
Buying a home is one of the most significant financial decisions most people will make in their lifetime. For first-time buyers, the home loan application process can seem daunting. However, if you are prepared and understand what financial questions to ask yourself before approaching a lender, you will not only feel more confident, but you'll also increase your chances of securing a bond.
read more
Real Estate Tools
Bond Calculator
Calculate the estimated repayments on a home loan and savings with extra payments