If you are looking to buy property in Johannesburg but like many other South Africans are concerned about the financial climate, then this article will enlighten you on some pointers of how you can maximize the current interest rate to benefit you.
We all know that times have been tough of late for most South Africans, and you would not be alone if the positive news regarding the prime lending rate remaining at a 10.25% and the repo rate at 6.75% lets you exhale a sigh of relief. Although as is the case with most things this will not be permanent, in actual fact now would be the time to ensure that any tough times ahead are lightened by investing a little bit more on your monthly payments, not only will this help in the future but it will also ensure that your repayment period is shortened.
Adrian Goslett, the CEO of RE/MAX Southern Africa suggests that homeowners should reinvest the money that they would have spent if the interest rate were to have increased back into their home loan. “By means of an example, a R1,500,000 property at a 10.25% interest rate will cost you over R3,500,000 over a 20-year period of instalments.” meaning that your monthly payment will work out to around R14,700.00, by adding only R300 to your installment this will bring your repayment period down by as much as by over a year, and if you tally up the amount you will be saving in the long run it will work out to as much as R130,000.00.
It is then a no brainer that by tightening your belt when times are good, you will save in the long run, not only making those tough times more bearable but ensuring that you save at the end of the day.
