Big four bank Absa (JSE:ASA) has decided to stop clients accessing equity in their bonds, as property prices fall and the bank's cost of holding capital to support unutilised facilities shoots upwards.

Clients will also have to "apply" to get their hands on extra cash that has been held in their home loans.

South Africans have been widely encouraged to plough extra savings into home loans, in order to reduce interest repayments over time. As interest rates for debt are higher than for savings, it has made sense for many people to use their mortgages as a handy savings facility.

Many consumers have also been able to access equity that has built up over time in their properties. Or, re-access capital up to the amount of their original loan.

This week, it emerged that Absa has decided to tighten up on people using their mortgages as a way access extra cash easily. The move has sparked concern among clients.

Absa confirmed to Realestateweb.co.za that it has decided to amend its FlexiReserve Comprehensive facility.

Customers "will no longer be able to access the equity in their home loans". If you want this money, you will have to apply and meet various criteria, including of the National Credit Act.

Absa said that customers who have been paying additional money, over and above required home loan amounts, can access their savings by applying and filling in a form.

The bank said it has sent letters to its clients and that amendments to the facility have been staggered and take place between 15 October and 24 November.

The bank sent a "holding statement" about the matter shortly before the close of business on 14 October.

Absa home loans managing executive Luthando Vutula told Realestateweb.co.za there is some misinformation doing the rounds about the latest decision by the bank.

He said clients will still have access to pre-paid amounts - the only difference is you will have to apply. He said it would take about 24 hours to access these funds. Re-paid capital would be regarded as equity.

Accessing equity is another matter and will be based on whether you can afford to repay the money, not the asset value. That process will be in line with the onerous National Credit Act (NCA).

Vutula said falling residential property prices were a major consideration in the decision - and even though Absa's house price index is still in positive, albeit low, terrain.

"The reality is property prices have gone down in the last six months. Compare the return of about 1,6% to the 20/25% we used to enjoy," said Vutula.

In the statement, Absa said the reason it decided to amend the facility was because of the "decline in property values over the past six months".

"The bank felt that allowing access to the original loan granted without a validation of the property's value increased the risk for both the customer and Absa." It said it believes this amendment will prevent customers from "going further into debt" and putting their homes into jeopardy.

Absa said a factor in the decision has also been "the substantial increase in the cost of holding capital to support all unutilised facilities".

"This means that customers will no longer be able to access the equity in their home loans via the FlexiReserve Comprehensive option as they have done in the past," it said.

An alternative option for customers with no advance or prepaid amount, who would like to access the difference between the outstanding balance and original loan amount granted, is to apply for a re-advance "which is subject to the normal credit and pricing criteria".

"If a customer's home is worth more than the value of the home loan they took, the customer may apply to increase the value of the loan amount. This is a further re-advance option and normal credit criteria and pricing policy will be applied."

Absa said customers can access advanced/prepaid amounts through various banking channels including internet and cellphone banking or an Absa branch.