You may already be plotting your move to enter the market and look at property in Limpopo, especially after the Reserve Bank Monetary Policy Committee revealed that the repo rate will remain unchanged.
This was a decision celebrated by South Africans and industry experts, as it means that the repo rate stays at 6.75% with the prime lending rate at 10.25%.
This plays into the fact that many believe there will be improvements over the course of 2019, but don’t be fooled into thinking that it is time to start a party.
When looking at the situation, there are two options presented to most South Africans, and that is to enjoy the good times, or prepare for the times ahead. Experts will insist that the latter option is best, and if you want to make the most of the current opportunity, then it may be time for you to tighten your belt.
There is no guarantee that the repo rate will stay as it is for the rest of the year, and a simple way of preparing for any changes is to create an increase of your own. If you are able to put away an extra 0.25% of your home loan instalment into a savings account each month, it could come in handy if the rate is bumped at a later stage. And if not, it allows for some emergency funding in the event that you need some breathing space later in the year.
Another option that you could consider is to take that amount and put it straight into your home loan at the moment.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, used an example of a property worth R1.5m, 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.”
