Home loan ‘reward’ not very rewarding
Revolving facility proves to be an expensive option
A bond repayment product meant to put money back into the pockets of homeowners in good standing has left a bitter taste in the mouth of a Limpopo property owner.
Ntantele Legodi, 57, had hoped to take advantage of Nedbank’s NedRevolve - a product that is seemingly a reward for homeowners who pay extra bucks on top of their agreed monthly mortgage repayments with Nedbank.
According to the bank, the NedRevolve facility enables clients to access surplus funds that accumulate when clients pay more than the minimum instalment or a lump sum into their home loan accounts.
“But it does not have the functionality of a savings account.”
However, Legodi claims to have paid more than R100,000 extra towards his bond and says the bank was only willing to give him back R30,164, which he says he was told would extend the length of his bond repayment period.
Legodi bought the threebedroom property in Seshego, Polokwane, in 1998 for R120,000 and took a further R180,000 loan from Nedbank to extend the property. The loan was consolidated into his bond, which at the time had a R40,000 balance. The total debt currently sits at about R160,000.
Legodi says he approached the bank in January with the aim of withdrawing the surplus amount he had accumulated. He says he was told the withdrawal would affect his bond.
“I am disputing the actual amount available for transfer. I strongly believe the amount should be more than what is reflected in the attached document from Nedbank. This is based on the fact that I have been paying more than the monthly instalment. For example, the whole of 2020 and 2021 I have been paying more than R1,000 [extra] per month, which amounts to over R24,000 to date before I include interest generated by it. Given that plus the interest it has generated in Nedbank’s account since 2017 it should be more than R120,000,” Legodi told Sowetan Consumer.
He is also disputing that his withdrawal would have implications for his bond.
“I am disputing the information told to me by Nedbank that I cannot claim the money and that if I claim the money it will increase my balance on my bond. The employee claimed that it will be like taking up a new loan. How can I owe Nedbank money that belongs to me and how does that increase my bond balance? I am paying my bond on a monthly basis and I don’t have any arrears.”
Legodi lodged a complaint with the bank in January this year and according to their explanation, the transfer scope [money due to client] fluctuates.
An email from the bank reads: “Kindly note that the balance decreases when a payment/s are made, hence when the withdrawal is made, the balance increases again.
“Further to this, interest is calculated daily on the outstanding balance, therefore if extra payments are made into the home loan you will save on the interest because the balance is reduced, similarly if the funds are withdrawn, the balance increases and the interest is calculated on the increased balance.
“To the second statement, even though the funds cannot be accessed, the additional payments goes towards reducing the balance on the home loan. Please note that the NedRevolve does not have the functionality of a savings account.”
Legodi says the bank contacted him last week following Sowetan’s query to them last month.
“Someone from Nedbank called me and he said their system shows that R30,164 was due to me as a withdrawal despite my reservations about that amount. He tried to explain the amount but I was left even more confused. I ended up accepting what I was being offered because I need the money for my family,” said Legodi.
In their response to Sowetan Consumer last week, Nedbank’s Sarah Mautjana did not want to be drawn into Legodi’s case but said the matter had been settled.
“We confirm that our Nedbank Homeloans team has since made contact with our client, Mr Legodi, and have provided Mr Legodi with the relevant information as it relates to his NedRevolve facility. We further confirm that the matter has now been resolved,” said Mautjana.