applying for your bond make sure you fight for the best interest rate options
available. Banks will not offer you discount up front and you will be surprised
at how quickly you could score another half a percentage if you fought for it.
difference of even half a percentage point can make a huge difference in how
much you pay over the life of a loan. For example, the difference in the
monthly payment on a R700,000 mortgage at 8 percent vs. 7.5 percent is about R245
per month. Over 30 years, that's R88,200.
the repayment calculator tables to do the sums for yourself.
INTEREST RATE OPTION
interest rate is a fluctuating rate based on the prime lending rate, as set by the
bank from time to time. You are able to negotiate a potential concession with your
bank. If interest rates change, so does your monthly repayment.
the features and benefits of the Variable Interest Rate option?
interest rate is individually determined, based on your personal and property
You can switch from this rate option to another rate option at any time.
option cannot be fixed for a predetermined period.
Fluctuations in the prime lending rate affect the interest charged and the
monthly repayments on loans using this interest rate option.
the Variable Home Loan Interest Rate option?
believe that interest rates will be reducing in the short to medium term.
You have sufficient disposable income to handle variations in your repayment.
Example: The monthly repayment on a home loan amount of R400 000 if paid off
a 20-year period: At 13% = R4 686.00 | At 14% = R4 974.08 | At 15% = R5 267.16
INTEREST RATE OPTION
interest rate is an agreed upon interest rate that is fixed (does not change)
over a pre-determined period of time (term). Please note that the fixed rate
option is contracted for a specific term and, after this term, will revert back
to the prime lending rate, a variable interest rate, unless you opt to renew
the fixed rate option at the time of renegotiating.
the features and benefits of the Fixed Interest Home Loan Rate option? Certainty
regarding what your repayments will be for the specified period.
Protection against upward movements in the prime lending rate.
rate option may not be terminated prior to the expiry of the agreement.
The variable interest rate option or another fixed rate option can be applied
once the fixed rate option expires.
the Fixed Home Loan Interest Rate option?
regular payments with no surprises.
You have a limited or fixed income.
to stay in the home for a long time.
You want protection from rising interest rates. You
are refinancing at a time when interest rates are comparatively low.
details on the various costs involved in buying a property go here For more detailed information on Finance issues go here Go back to Buyers main page