FNB access bond and overpayments

Just pay off the bond as quick as you can
If you cannot afford it then sell a child
You can always make a new one later when the bond is paid off
 
ChristelleH said:
If I keep withdrawing from the flexi account, the money will eventually run out right? Meaning, if the interest accrued on the money is less than the amount I withdraw, the total in the flexi account will decrease over time?
Say I pay R700k into my bond, it sits in the flexi account, repayment stays the same but I withdraw R7000 from my bond (flexi account) every month, the R700k will over time run out?
Click to expand...

And what you saying, with time, your available also gets less and less (national credit act rule).

Keep that in mind
 
Pineapple Smurf said:
Just pay off the bond as quick as you can
If you cannot afford it then sell a child
You can always make a new one later when the bond is paid off
Click to expand...
Hahahaha, I agree. But my reason for asking or exploring this, is not because I cant afford my bond. OR to pay my bond quicker. Its a long story. Maybe I should elaborate so it will make more sense... Lol
 
ChristelleH said:
Hahahaha, I agree. But my reason for asking or exploring this, is not because I cant afford my bond. OR to pay my bond quicker. Its a long story. Maybe I should elaborate so it will make more sense... Lol
Click to expand...
We're here for you
Give us the full unedited version
The more info we have the more we can understand your real question
 
So, for those interested at all - sharing so I can possibly get advise on my best move.
I am currently taking care of my mother who is sickly and have no source of income. So Im currently spending around R5-7K a month just to keep her going. She lives in another town, but due to her illness, I realised we need to move her closer so I can keep an eye on her. Her house is now in the processing of being sold. The sale will provide around R700K cash (luckily the house she lives in is paid off)... Now I am trying to find the best way to use her money, while have her living in her own house/apartment. Property prices in our town are crazy, so to buy something cash here, will almost be impossible. I will maybe be able to buy a small flat, in terrible condition with that amount. So buying is out. Renting is out, because then her money will run-out fast, and then go where? So I was exploring interest bearing accounts, but that comes with its own challenges/ limitations. So I started looking at the flexi bond idea... To find a way how I can keep her money safe, and be able to pay her rent with the interest I get on it.... If this makes sense? So the whole focus for me now, is to get her sorted and not be better off, just be the same off considering I already spend x-amount on her per month to live.... So to spend even more than what I do now, will also put me under immense financial pressure......
 
ChristelleH said:
Okay, thanks for that. Only thing I dont understand now thou is, if Im paying R700k on my bond, why is my repayment per month not going down?
Because then my total owe decreases by R700k?
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You have 1,000,000 outstanding now at 10% interest.

So R8,333 in interest every month.

Let’s say your original instalment was R10,000 so only R1668 actually goes towards paying the loan off.

Now you put in your 700k and therefore your outstanding balance is 300k.

So now interest is R2500 per month and R7500 goes towards actually paying off the capital balance.

If you really wanted to have your monthly instalment go down you can put the 700k in and ask FNB to balance the account. But now you’ll lose access to that 700k and you’ll still pay your house for 20 years at basically the same interest rate meaning you lose out over the term.

You want to pay it off faster if you want to save money, not pay it longer for less.
 
ChristelleH said:
Very stupid question, but how can I calculate my interest savings? To have an idea how much I will be able to withdraw without decreasing the R700k....
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700k x your interest rate divided by 12.

So about R5833 per month at 10%.

FNB will also list the rebate on your statement every month so you could just use exactly that or less in which case it will keep growing.

A Home Loan (in SA) is generally the highest interest bearing account you can find and it’s all tax free.
 
SauRoNZA said:
700k x your interest rate divided by 12.

So about R5833 per month at 10%.

FNB will also list the rebate on your statement every month so you could just use exactly that or less in which case it will keep growing.

A Home Loan (in SA) is generally the highest interest bearing account you can find and it’s all tax free.
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Okay awesome, thank you very much. So in summary, I transfer the R700k (I dont request to capitalize/lock it in). My repayment stays the same, my R700k will stay there and I can access it if needed, but if I dont, and I ensure to only withdraw the rebate value (the interest that is on the money), I can manage to withdraw say +- R5833 like u said if the interest is 10% (might be lil more might be lil less depending on the interest movement), and my R700k will stay at R700k if I do all of the above?? Not grow, but wont decrease?
 
ChristelleH said:
Okay awesome, thank you very much. So in summary, I transfer the R700k (I dont request to capitalize/lock it in). My repayment stays the same, my R700k will stay there and I can access it if needed, but if I dont, and I ensure to only withdraw the rebate value (the interest that is on the money), I can manage to withdraw say +- R5833 like u said if the interest is 10% (might be lil more might be lil less depending on the interest movement), and my R700k will stay at R700k if I do all of the above?? Not grow, but wont decrease?
Click to expand...

Yup as long as you don’t draw more than the rebate it won’t go down.

And if you don’t withdraw it will go up by the same.

Just one thing to bear in mind is when you withdraw/transfer it must be more than R1,000 at a time.
 
I've been putting money into mine every month (plus a lump sum on a another house sale). I'm only 9 months into my bond and already reduced my interest by around R7k pm.
 
SauRoNZA said:
Yup as long as you don’t draw more than the rebate it won’t go down.

And if you don’t withdraw it will go up by the same.

Just one thing to bear in mind is when you withdraw/transfer it must be more than R1,000 at a time.
Click to expand...
Thank you so much!!!
 
ChristelleH said:
So, for those interested at all - sharing so I can possibly get advise on my best move.
I am currently taking care of my mother who is sickly and have no source of income. So Im currently spending around R5-7K a month just to keep her going. She lives in another town, but due to her illness, I realised we need to move her closer so I can keep an eye on her. Her house is now in the processing of being sold. The sale will provide around R700K cash (luckily the house she lives in is paid off)... Now I am trying to find the best way to use her money, while have her living in her own house/apartment. Property prices in our town are crazy, so to buy something cash here, will almost be impossible. I will maybe be able to buy a small flat, in terrible condition with that amount. So buying is out. Renting is out, because then her money will run-out fast, and then go where? So I was exploring interest bearing accounts, but that comes with its own challenges/ limitations. So I started looking at the flexi bond idea... To find a way how I can keep her money safe, and be able to pay her rent with the interest I get on it.... If this makes sense? So the whole focus for me now, is to get her sorted and not be better off, just be the same off considering I already spend x-amount on her per month to live.... So to spend even more than what I do now, will also put me under immense financial pressure......
Click to expand...

Just a word of warning, not sure who's bond you want to put this money into, but if your mother gives you the R700k to use for your own bond then there is a serious tax implication being donations tax which is levied at 20% of the donated amount. Whatever you do with the money make sure everything is done in her name otherwise you're looking at a hefty tax bill.
 
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