Positives of the interest rate
With the interest rates remaining as is, now might be the opportunity you have been waiting for to buy that property in Kempton Park, let’s take a look at how you can make the most of this.
We have received some positive news regarding the interest rate, and it is much needed, here is how you can benefit from this and look at buying property in Kempton Park. For many South Africans times have been tough with very little to spare regarding finances, but with a few good pointers from the experts you can not only benefit in the long run but save too.
With the prime lending rate remaining at 10.25% and the repo rate staying at 6.75% now is not the time to slack off on monthly payments, in fact quite the opposite. By adding a little extra to your monthly bond installment you can not only shorten the period of your repayments but also save a lot of money.
By reinvesting the money you would have spent if the interest rate had increased into your home loan, for example a property valued at R1,500 000.00 with an interest rate of 10.25% will add up to a whopping amount of R3,500 000.00 over a twenty year period of installments. Your monthly payment would roughly work out to R14,700.00, if you consider that if you increased that by only R300.00 a month, you will not only shorten your repayment period by a full year, but you will save yourself an extra R130,000.00, which will sure come in handy in the future.
Adrian Goslett, Regional Director and CEO of RE/MAX Southern Africa suggests that by tightening your belt now you will be preparing for incremental increases throughout 2019. So when eventually the increase arrives you will already be accustomed to living off a smaller budget. “Also, there will be a little emergency money set aside to provide for some financial breathing space if necessary,” he says.
