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National Credit Act, 2005 (Act No. 34 of 2005)


National Credit Regulations, 2006

Chapter 5 : Interest and Fees

Part C : Interest applicable to different products

43. Supplementary conditions on the application of the maximum initiation fee


The following supplementary conditions shall apply on the application of the maximum initiation fee:


(1) An initiation fee may be charged at the registration of a replacement mortgage in respect of a transfer from one credit provider to another, without there being a transfer of ownership of the mortgaged property, only if—
(a) the transfer is done at the request of the consumer; and
(b) the levying of the fee and the amount of the fee has been disclosed to the consumer by the acquiring credit provider before the consumer has agreed to the transfer.


(2) No initiation fee may be charged on credit agreements as envisaged in Section 101(2).


(3) Initiation fee may never exceed 15% of the principal debt.


(4) An initiation fee must only be charged when a new credit agreement is established with a consumer and must not be charged on a transactional basis where there is no new credit agreement with the consumer.

[Regulation 43(4) inserted by regulation 4 of Notice No. 1080, GG 39379, dated 6 November 2015]