MONTHLY COSTS OF  OWNING A HOME

BOND REPAYMENT
Below is a table for you to quickly calculate your bond repayment amount.
 
All you have to do is look at your rate and the period applicable to you and multiply that amount per thousand you are borrowing. For Example ;
 
If you are borrowing R500,000 at an interest rate of 9.5% over a period of thirty years –
Your calculation will be 500 x 8.41 = R4205 payment per month or ;
 
If you are borrowing R1200,000 at an interest rate of 8.0% over a period of 20 years –
Your calculation will be 1200 x 8.36 = R10032 payment per month.

  15 Years 20 Years 25 Years 30 Years
7.0 8.99 7.75 7.07 6.65
7.5 9.27 8.06 7.39 6.99
8.0 9.56 8.36 7.72 7.34
8.5 9.85 8.68 8.05 7.69
9.0 10.14 9.00 8.39 8.05
9.5 10.44 9.32 8.74 8.41
10.0 10.75 9.65 9.09 8.78
10.5 11.05 9.98 9.44 9.15
11.0 11.37 10.32 9.80 9.52
11.5 11.68 10.66 10.16 9.90
12.0 12.00 11.01 10.53 10.29
12.5 12.33 11.36 10.90 10.67
13.0 12.65 11.72 11.28 11.06
13.5 12.98 12.07 11.66 11.45
14.0 13.32 12.44 12.04 11.85
14.5 13.66 12.80 12.43 12.25
15.0 14.00 13.17 12.81 12.65

LIFE INSURANCE
You may be required by the bank to insure your bond by means of a life insurance policy or even disability cover. This is to protect them in the event of your death or disability, in which case, the bond is then fully settled.
 
They will assess the circumstances and particularly, if your deposit is very low and they are at full risk on the property. This is obviously of benefit to you as well – in the event of death, the property is paid in full and your family inherits without any debt.
   
RATES
From the registration date, you are responsible for all the council, water rates and levies on a property. You may have to reimburse the previous owner on a pro rata basis for any payments they have already made, as the rates must be fully paid until June for transfer to take place. Your agent or attorney will work these out for you as well as advise you of the current monthly rates.
 
All property owners will be sent municipal accounts with their new rates and tariffs reflected. If you wish to calculate what your monthly rates will be, ask your agent to access council records for your valuation and use the formula and table below to do the sums.
 
EXAMPLE 1: You own a residential property with a value of R500 000.
The tariff for a residential property as per the table is 0.5321 cents in a rand. As per MPRA, a R15 000 reduction on residential property value is applicable. Work out the rate as follows:
R500 000 (-R15 000) x 0.5321 cents in a rand = R2580.68 per annum
R2580.68 divided by 12 = R215.05 per month
 
EXAMPLE 2: You own vacant land with a value of R90 000.
The tariff for vacant land as per the table is 1,5961 cents in a rand. Work out the rate as follows:
R90 000 x 1,5961 = R1436.49 per annum
R1436.49 divided by 12 = R119.70 per month
 
Category Tariffs
Residential Property 0,5321
Smallholding Residential 0,5321
Smallholding Industrial 1,3301
Smallholding Business and Commercial 1,0640
Residential Property Mixed Use 0,7981
Farm Property Residential 1,5961
Agricultural Property (Farms & Smallholdings) 0,1064
Farm Property Industrial 1,3301
Farm Property Business and Commercial 1,0640
Business and Commercial Property 1.0640
Industrial Property 1,3301
Vacant Land 1,5961
Municipal-Owned Property 1,0640
State-Owned Property 1,0640
Public Service Infrastructure 0,1330

Go here to view an extract of the Municipal Rates Policy
Go here to Download the Municipal Rates Info Sheet

ELECTRICITY AND WATER  
Port Elizabeth sill has of the cheapest water and electricity services in the country.  A typical three bed roomed home with no pool, will have an amount of roughly R350 for electricity and R110 for water.
Why not look at the resources page for energy saving tips.
 
REPAIRS AND MAINTENANCE
Every home has a maintenance cycle and you will need to consider your budget each year to accommodate this. It is a good idea to have a savings account into which you pay a monthly amount so when the time for repainting for instance comes along, you do not have to find the money all at once.

BUILDING INSURANCE
The responsibility for insurance and risk of loss is the role responsibility of the house owner and you will need to ensure you have sufficient cover in place. Your Finance company might attempt to force you to use a company of their choice in which case these payments will be included in your monthly bond statement.
 
This is done firstly to ensure that your cover is adequate both in type and value. Secondly this is done of course to earn the bank commissions. Make sure you obtain a comparative quote, as in many instances, you will be able to save yourself money.
 
BODY CORPORATE FEES                                                    
When purchasing into a property that may have one or more owners such as sectional title units, you need to make allowances for payment of levy costs involved with the maintenance and insurance of the property. These include body corporate fees as well as contribution to capital funds for large future upgrades.
 
Typically, this will include your portion of rates and water, insurance, regular maintenance to exteriors of building, security and so on. Your agent will advise you exactly what the current levies are of the unit you are purchasing. Make sure which costs are included and do no assume anything. The City of Cape Town has now forced sectional title owners for instance to pay the rates personally and not through the body corporate.
 
Go to Once off Costs
Back to Costs of Buying a Home


For more detailed information on Finance issues go here
For more Articles on Legal issues go here

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