Tips on Becoming Bond Free in Light of Recent Interest Rate Increase - Harcourts South Africa
Category Property Advice
Richard Gray, CEO of Harcourts South Africa, a leading real estate agency in the country, has shared his tips on becoming bond free in light of the recent interest rate increase. The South African Reserve Bank (SARB) recently raised its repo rate by 50 basis points to 7.75%, resulting in a hike in interest rates to 11.25%, which affects homeowners with bonds.
Gray emphasised the importance of reviewing one's budget and making adjustments to account for the higher interest rates.
"With the recent interest rate increase, homeowners should take a closer look at their budget to ensure they can still afford their bond payments," Gray said. "If necessary, adjustments should be made to prioritise paying off the home loan faster and reducing the amount of interest paid over the life of the loan."
He also suggested that homeowners should consider refinancing their mortgage to a shorter term or a lower interest rate, which can help to reduce the amount of interest paid and pay off the bond faster.
"Refinancing your mortgage can be a smart move if it helps you to save money on interest and pay off your mortgage faster," Gray added. "It's important to consult with a reputable lender and weigh the pros and cons before making any decisions."
Gray also advised homeowners to make extra payments towards the principal debt whenever possible, such as using a bonus or tax refund to make an additional payment.
"Making extra payments towards the principal amount of your home loan can make a big difference in reducing the amount of interest you'll pay over the life of your loan," Gray said. "Even making small additional payments on a regular basis can have a significant impact over time."
Gray concluded by emphasising the importance of seeking advice from a professional, such as a financial advisor or real estate agent, when considering how to become bond free in light of the recent interest rate increase.
"Every homeowner's situation is unique, and what works for one person may not work for another," Gray said. "It's important to seek advice from a professional who can provide personalised guidance and help you to make informed decisions about your financial future."
Author: Harcourts SA
