Borrowers have to face up to yet another interest rate hike as the prime lending rate and home-loan rate goes up by one percentage point from 16 percent to 17 percent as from today. This is the fourth interest rate increase this year.
The latest increase means that you will pay about R75 a month more on a R100 000 loan, R151 more on a R200 000 loan and R227 more on a R300 000. These figures are based on loans at an interest rate of 17 percent a year over a 20-year loan period.
While you may be in a tight spot with your finances following the latest increase, remember that paying even a little extra into your loan each month will save you a significant amount of money.
For example, on a R300 000 loan taken out at 17 percent over 20 years, paying an extra R20 (over your normal monthly repayment of R4 400) will save you almost R33 000 in interest over the life of the bond.
You will also shave three months off the life of your bond.
- Use the online loan calculator on our website to calculate your new monthly home loan repayments. Go to www.persfin.co.za, then click on Financial Tools and then choose Extra Payments. This calculator will also tell you how much you can save by paying an additional amount into your loan each month.