Save Big on Your Bond with One Simple Monthly Trick

Save Big on Your Bond with One Simple Monthly Trick

Making small additional payments on your monthly bond can result in substantial long-term savings, and significantly lessen your repayment timeline and interest costs, potentially saving you millions. 

Unlike renting, owning a home is an investment in your own future, instead of paying off someone else's property. For first-time buyers, a strong credit score is essential for securing a home loan. Many banks still offer 100% Home Loans,  plus extra funds for related costs (like bond registration costs), while properties under R1.1 million are exempt from transfer duty, making property ownership more affordable and more accessible.

To maximise savings on your bond, keep your payments steady even if interest rates decrease, or allocate any extra funds toward your bond. This approach can significantly cut down both the repayment duration and total interest paid.

Understanding Your Payments

Although a 10% interest rate may seem distant, experts suggest the current interest rate cutting cycle could end by mid-2025.

Here's how you can save: As an example, on an average home price of R1.427 million and a current interest rate at 11.75%, your minimum monthly repayment would be R15,461. If interest rates drop to 10% and you continue paying R15,461, you could reduce your repayment term to about 14.71 years, saving over five years and nearly R1 million in total.

For a 30-year bond, maintaining higher payments after a rate drop could shorten your term to just over 17.5 years, resulting in savings exceeding R2.15 million.

Embrace Financial Freedom

By carefully managing your bond repayments, you not only improve your financial security but also set the stage for future investments. Small extra payments can significantly lessen your repayment timeline and interest costs, potentially saving you millions. Start your homeownership journey today and secure a brighter financial future. Get in touch with us today.