Down-scaling can relieve financial pressure

The series of interest rate hikes have made the cost of monthly home loan repayments soar for many homeowners.

For those who took an R1m home loan when interest rates were at their lowest in July 2020, the bond repayments would now be almost R2 800 more at the current interest rate.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa warns although it can be difficult, given the last steep interest rate increase, homeowners need to prioritise keeping up with the repayments on the home loan or risk losing the house and tarnishing their credit score.

He recommends if things get too tight act sooner rather than later. Rent out a spare room in your home to help you afford the repayments or downscale to something more affordable before things get too out of hand.

“Living in a smaller space is also far more cost-effective, which could help struggling homeowners keep up with the rising cost of living. Larger homes often mean running up larger water and electricity bills than a smaller home. That translates into more disposable monthly income for those who choose to down-scale.” said Goslett.

By down-scaling, homeowners might also need to sell some furniture and other items that might not fit into the new home. This could also bring in extra cash to help cover the higher costs of other debt repayments.

“When moving to a smaller home, every square metre becomes essential. This usually means fewer spaces to clean and less space to store unnecessary items, which could create a less stressful, less cluttered home,” he adds.

“You might be surprised by what you find when you start looking. If you establish a good working relationship with a reliable property professional, they can walk you through your options and provide you with valuable guidance,” he concludes.

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