With South Africa currently being in the midst of an unforeseen buyers’ market, there has never been a better time to purchase a home.
South Africa’s banks are currently boasting the lowest interest rates in over 50 years.
We know that buying a home is a big decision. This may be the best time to take advantage of the low interest rates and invest in property, like one of our family-friendly houses for sale in Mooikloof Country Estate, in the Garden Route.
It has been difficult for many to save towards significant purchases recently, such as a deposit for a house. However, some banks are now offering 100% home loans, which means that a bond has never been more attainable.
When considering a bond, look at a house not just as a chance to own your own home, but as a serious investment that can offer you a return, if you manage it well.
So what are the benefits of a bond, other than for a home purchase?
You can actually use it to consolidate your debt. If your interest rate on your vehicle finance, for instance, is higher than your interest on your bond, it might be better to add it into your bond. Just bear in mind that your home loan term is usually a lot longer than a vehicle finance term, so make sure you are aware of the final repayment amount.
Another advantage is that you can boost your credit rating. As long as you are keeping up your monthly repayments, you will strengthen your credit rating and create a good credit history. This has the added benefit of gaining access to better lending rates, if you are considered a suitable creditor.
Save or Bond?
The lower REPO rate (determined by the Reserve Bank) has not only led to lower bond rates, but also brings down the rate you would receive on savings and investments. So consider whether the low savings rate means it would be better for you to continue saving, or rather pay more towards a home loan.
Your home loan amount will be made up of capital and interest. Your initial repayments might only cover the interest, but will eventually start to pay off the capital portion of the loan. Paying additional lump sums into your bond will go towards paying off the interest and capital quicker. The biggest saving here would not only be to lessen your loan term, but it would also reduce the amount of interest you repay. So while you see the immediate benefit from saving your money, always look at the interest rates to help you decide if it would be better to pay off your bond earlier.
Home loans have never been more affordable, and our secure Mooikloof Country Estate units start from just R1,034,000.
We have already sold out on our phase 1 units. Phase 2 units are now available for sale, and include options for investors, first-time buyers, young couples and those who want to downsize. Phase 3 of the Mooikloof development is planned as a retirement estate, to give you peace of mind in your golden years.
