Make the right move after repo rate decision

You may be tempted to scour property for sale in Germiston in 2019, with all the positive talk about what this year has in store, but according to experts, a level of caution must be taken. To stay up to date on all matters relating to the property market, it is essential to stop past the Private Property website on a regular basis.

In a recent article, they looked at the decision made to keep the repo rate on hold. A number of experts praised the Reserve Bank Monetary Policy Committee for keep the rate at 6.75%, with the prime lending rate staying at 10.25%. Although it is reason to celebrate after enduring a never-ending string of increases last year, experts belief this is the opportunity to prepare for any bumps further down the road.

There is no certainty that the repo rate will remain as is for the foreseeable future, and as such experts advise that you keep your budget tight and if possible, put an extra 0.25% of your home loan instalment away for a potential rainy day. If the rate changes later, you will be fully prepared and if not, you have some emergency funds.

Another smart move would be to pay that extra 0.25% directly into your home loan, as it will go a long way in shortening you repayment terms down the line. Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, uses a home worth R1.5m as an example, saying, “By putting in just an extra R300 per month towards your bond, the repayment period would be shortened by over a year, saving you R130,000 – enough to buy an entry-level car. Putting in an extra R500 per month would shorten the repayment period by two years and save you around R200,000.”