Discovery Bank’s home loan product, launched in May 2024, has experienced robust growth, with the bank aiming to disburse R766 million by the end of the year. Discovery Bank, which recently surpassed one million clients and achieved operational breakeven, is looking to disrupt South Africa’s R1.8 trillion home loan market, traditionally dominated by the country’s “Big Four” banks—Standard Bank, FirstRand, Nedbank, and Absa.

The bank’s home loan product leverages its shared-value banking model, allowing clients to reduce interest rates by up to 1% based on sound money management. This model has proven successful, with over 80% of home loan clients switching from existing providers to benefit from better pricing, while the remaining 20% are new loans. Discovery identified a significant opportunity, noting that around 60% of homeowners are overpaying on their mortgages due to high switching costs or mispriced loans.

Discovery Bank has adopted a conservative approach, accepting only 20% of home loan applications to maintain a high-quality, low-risk client base. Despite entering the market during a period of high interest rates, the product has attracted significant client interest, with switches driving the bulk of growth.

In addition to home loans, Discovery Bank’s offering supports other parts of its business, including insurance and solar financing, contributing to the group’s overall ecosystem. Through these synergies, Discovery continues to attract new clients, with 60% of its new home loan clients having no prior Discovery product, further expanding its financial services reach.