It's crazy my bond is R525000 which makes my repayments R4700. I'm currently paying an extra R3500 a month, if I do this for the entire term I save R425000 in Interest which means I can buy another place.Quote:
This is sound advice
pay just 10% more monthly and you take 5 years off your term.
this calculator works well.
Now the question is if I take all the money that's been overpaid in my home loan (which is enough for a deposit), buy another studio flat and rent it out will that be beneficial to me?
Thanks for the info guys, much appreciated, Two payments a month then!Quote:
Originally Posted by etwylite
You are correct.
Your repayments are calculated over 240 terms (12 months 20 years) to reduce your capital amount to 0. If you take those repayment amounts and pay 1/2 fortnightly you will pay your loan off sooner without effectively paying more monthly because for for 15 days each month you save the additional interest that would have been calculated on the full outstanding balance. This saving compounds monthly effectively saving you substantial amounts over the total loan period.
You could only do that if you were being paid twice a month.