Thursday, 30 March 2017 18:30

Interest rate proof your home loan

Written by
Rate this item
(0 votes)

“We welcome today’s decision by the Reserve Bank’s Monetary Policy Committee to maintain the repo rate at 7% as it provides some relief to consumers dealing with rising food inflation and taxes”, says Bruce Swain, CEO of Leapfrog Property Group.

Bruce_Swain_MD

“That being said, interest rates rise and fall and ultimately I would advise home owners not to worry about it too much.

We may be at the end of the recent rising cycle, we might not – rather focus on paying a little extra into your home loan every month and you’ll always have a buffer against any rates increases”.

Swain explains that if a buyer purchases a property for R1.2 million, with a deposit of 20%, with a repayment at 11% over twenty years, it will cost the buyer R9,819 per month (excluding interest and municipal rate fluctuations). However, if the buyer increases their repayment by R500 per month the term reduces by 3 years, with a saving in interest of R251,484. Increasing the repayments by one thousand rand per month, reduces the term by 5 years, saving the buyer R409,140 in interest.

“Paying in as little as R500 a month extra into your home loan significantly reduces the interest payable over the duration of the loan – making it interest rate proof in a way”, says Swain. 

Last modified on Thursday, 30 March 2017 18:38

Most Popular

How smart corporates are maximising returns by consolidating their property footprint

Sep 01, 2017
Amrod
For businesses that are seeking to be more efficient and productive, consolidating…

JSE listed Rebosis Property Fund announces R917 million B-BBEE transaction

Sep 01, 2017
Andile Mazwai COO Rebosis
Rebosis Property Fund, the JSE’s first listed black-managed and significantly black owned…

Middelburg Mall goes green with innovative energy saving solution

Aug 24, 2017
Middelburg Mall Aerial
Middelburg Mall will soon be greener and even more environmentally friendly through the…

Growthpoint Properties posts forecast-beating distribution growth and achieves key strategic successes

Aug 31, 2017
Growthpoint Norbert Sasse
Growthpoint Properties today posted distribution growth of 6.9% per share for its…

Energy saving technologies will help consumers prepare for massive electricity price hikes in 2018

Sep 06, 2017
Cala van der Westhuizen
The latest ruling by the Constitutional Court, allowing Eskom to retrospectively ask the…