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The recent announcement by the South African Reserve Bank to increase the lending rate by 50 basis points, means the repo rate (the rate at which the central bank lends money to commerical banks) will increase to 8.25% and the prime lending rate to 11.75%.
For individuals an increase in the interest rate has implications for those with any form of lending or debt, due to higher interest rates translating to higher debt repayments.
We are here to offer solutions to ensure affordability for that dream home you have your eye on.
A budget assists in creating financial stability. By tracking expenses and following a plan, a budget makes it easier to pay bills on time, build an emergency fund, and save for major expenses such as a home.
If you struggle to manage your money, embrace technology by downloading a budgeting app, this will help you better track, save and spend and allow you to be consistent with daily reminders and notifications
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Did you know that it is possible to shave off years from your home loan repayments?
Follow the below methods to repay your bond faster, combatting constantly rising interest rates. If you pay it off faster, you will save on interest and accummulate your savings for financial freedom.
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PAY EARLIER
Many homeowners are not aware that interest rates are calculated daily. This means that the earlier in the month you pay, the less interest you accumulate. This can cut years off of your loan in the long run.
PAY MORE THAN REQUIRED
Bonds are structured in such a way that at the start of repayments, you pay a much higher amount towards interest than capital. This means that a huge chunk of your repayment goes towards the interest. Rudi Botha, CEO of bond originator BetterBond, implores homeowners to become more aware of the benefits of saving by paying an additional amount off every month.
PAY ANY LUMP SUMS TOWARDS YOUR BOND
Whenever you get a cash injection in the form of a 13th cheque, bonus, commission, tax return or even an inheritance, put it straight into your bond. Shaun Rademeyer, CEO of BetterLife Home Loans, notes that making as many lump-sum deposits as possible can help to reduce the overall amount.
Make use of our Bond calculator to find out the repayment on an Ingwe property you are wanting to buy.
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