CityPress - - Business And Tenders & Auctions -

An ad­di­tional R1 000 pay­ment a month on a bond of R1 mil­lion at the cur­rent prime lend­ing rate of 10.5% will re­duce the term of the loan by al­most five years, ac­cord­ing to Adrian Goslett, re­gional direc­tor and CEO of prop­erty agency RE/MAX.

“That is a 25% re­duc­tion in the term of the loan for a monthly re­pay­ment that is 10% higher. By pay­ing ex­tra into the bond and re­duc­ing the term of the loan, home­own­ers will be able to de­crease the over­all in­ter­est amount they pay. The money saved can be put to­wards re­tire­ment or per­haps a child’s ed­u­ca­tion,” he says.

This month, home­own­ers breathed a sigh of re­lief as Re­serve Bank gov­er­nor Le­setja Kganyago an­nounced that the repo rate would re­main un­changed at 7%, mean­ing that the prime lend­ing rate would stay at 10.5%. This was good news as we head into an­other year of pre­dicted slow growth.

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