By Helen Nyambura-Mwaura JOHANNESBURG (Reuters) - South Africans are finding it more difficult to keep up with their mortgage payments as the cost of living and interest rates climb, the country's fourth-largest lender said on Thursday. South Africa's central bank has raised its key repo rate by a cumulative 75 basis points this year while inflation has remained above the central bank's 3 to 6 percent target for much of the year. "We are starting to see that strain that customers are under is starting to reflect in terms of their ability to make repayments in a consistent manner. And not just us, the industry is starting to sense that," said Timothy Akinnusi, head of home loan sales at Nedbank. The subsidiary of UK-listed insurer Old Mutual was not seeing more defaults in Africa's biggest mortgage market but more clients were offering to sell their homes in the event they could not keep up with monthly payments, Akinnusi said. The South African Reserve Bank said on Wednesday that although household wealth had increased sharply as a result of rising values of financial assets, consumers remained vulnerable. South Africa's economy has slowed and is expected to grow by a relatively modest 1.4 percent this year. Nedbank has been on a steady recovery since its retail unit was hit by soured home loans following a 2009 recession and its 120 billion rand ($11 billion) mortgage book now has a non-performing loan ratio of 5 percent. In order to offer better-quality loans, the lender is now arranging the majority of its home loans in-house after years of depending on third-party loan arrangers. The number of mortgages arranged by third parties now account for only about 25 percent of loans written, down from about 70 percent a few years ago. Nedbank's own consultants are now responsible for 35 percent of the business. The bank is now also directing potential customers to apply online and promising credit approvals within hours. Online applications accounted for 13 percent of new loans so far this year, amounting to a total value of 1 billion rand, Akinnusi said. Although Nedbank has only about a 15 percent market share, it was not looking to expand blindly and would only go after high quality customers in anticipation of softer South African consumer demand in the coming year. "For the industry as a whole, 2015 will be quite a tough year for a lot of consumers looking to acquire homes just because of the economic situation," Akinnusi said. (1 US dollar = 10.9106 South African rand)