FNB flexibond

[NoviceDIYer]

Hi,

I am waiting for my FNB flexibond to be registered. I got a rate of 9.5% which I am quite happy with.

My question is: if I want to use this as a place to store my emergency fund, how exactly does it affect the repayments?

For example, if I put 100k in there after registration, I understand that amount will still be available for me to transfer out again. I also know that interest is calculated daily so my interest is reduced.

What I don’t know is how exactly the repayments get affected. Will my debit order payment automatically be reduced due to the additional payment? Or, will my repayments stay the same but the interest part is less, meaning that more of the normal debit order goes towards the capital balance owed?

If the monthly repayments reduce, I am concerned that if I transfer out my whole emergency fund later, my repayments may jump up above the original payment amount. Or is it set up so that will never happen?

Does my question make sense? Sorry if it sounds like a stupid question.

 

[HeftyCrab]

I think its this:

will my repayments stay the same but the interest part is less, meaning that more of the normal debit order goes towards the capital balance owed?



Also, at the start of the month, they freeze all the funds in the homeloan account. They then check if your normal debit order happens.If it doesnt happen they debit the extra funds from the homeloan account.

 

[NoviceDIYer]

I think its this:

will my repayments stay the same but the interest part is less, meaning that more of the normal debit order goes towards the capital balance owed?



Also, at the start of the month, they freeze all the funds in the homeloan account. They then check if your normal debit order happens.If it doesnt happen they debit the extra funds from the homeloan account.

Thanks!

 

[rodga]

You can choose to reduce your payments or you can keep them the same. Keeping it the same will reduce your payment term.

I'm with nedbank and they initially reduce my my monthly debit order but I just called them to keep it the same.

 

[TedLasso]

Since your question is answered, I have a question re your interest rate, what percent deposit did you put down to get that rate as I guess 9.5 is a good rate. I need to see what mines today, but mines was. 9.75 when I started and that was a bond which was only 50% of the value of the house . Maybe its time to renegotiate 18 months later.

 

[Akafreakazoid]

Also, at the start of the month, they freeze all the funds in the homeloan account. They then check if your normal debit order happens.If it doesnt happen they debit the extra funds from the homeloan account.

It doesn't matter how much you have in flexi portion. If you default on paying, you run that risk of repo. You should manually make payment from flexi portion of unable to cover normal payment.

 

[Dolby]

Ah it seems the days of prime plus are over ... I also got 9.75% a few weeks back. I only managed to sign a few days back though, so I believe it takes a few weeks for the cash to reflect

 

[NoviceDIYer]

Since your question is answered, I have a question re your interest rate, what percent deposit did you put down to get that rate as I guess 9.5 is a good rate. I need to see what mines today, but mines was. 9.75 when I started and that was a bond which was only 50% of the value of the house . Maybe its time to renegotiate 18 months later.

Hi, actually, my rate was a surprise to me. I previously had an FNB flexibond bond with 9.7% which is about 9 years old. My existing FNB bond is one of those flexi bonds where the capital amount paid off becomes available to you as well as the prepaid funds. I know they have stopped those, so I wanted to understand how it works with the traditional flexi bond, hence my question.

Since my home has appreciated a lot since 2009, and they came and did a valuation as well, I assume I have a lot of equity in my home. I applied for a further bond of 400k on top of what I already owe and was really expecting a worse rate then my existing bond. Part of the further bond conditions are that they will review your rate and I expected that to be a negative thing. Both the HL consultant and the attorney commented that it was a very good rate based on what they had seen lately.

All in all, the attorney fees for the further bond were about 10.5k and I am coming out with a better rate. My total bond is 1,525 million over 15 years.

You could just get a quote from them and see what happens?

 

[zerocool2009]

From FNB's side, there are a few different flexi homeloans (meaning, they redesign flexi's time after time) and rules differ.

To answer the first email (from NoviceDIYer), if you put R100k in from day 1, your debit order will stays the same, and you will have R100k available, but you will save on interest.

Once you ask to review your bond (they will take the R100k prepaid into account), lower your bond but the R100k isnt available any more.

Related to debit orders :
If a debit order goes off, after 7 days, you can borrow against that debit order again (if that makes sense)

PM me if you want more info NoviceDIYer

 

[zerocool2009]

Ah it seems the days of prime plus are over ... I also got 9.75% a few weeks back. I only managed to sign a few days back though, so I believe it takes a few weeks for the cash to reflect

If you prepay the flexi bond, it is available within 2 seconds (meaning directly)

If you are talking about a debit order (you can borrow against that only after a week again).

Take note, this is FNB

 

[SauRoNZA]

Your Repayments don't get affected unless you ask them to re-calculate in which case they "lock in" all the Prepaid funds and you no longer get access to them as they are taken off the capital balance permanently.

Instead what happens in real time is that your Interest Rate is calculated off the Capital Balance - Flexi Balance which means indirectly per month you'll safe 9.5% of X Prepaid Balance/12.


Something to bear in mind is that if you want to transfer money out it needs to be R1000+ and no less.

 

[zerocool2009]

Your Repayments don't get affected unless you ask them to re-calculate in which case they "lock in" all the Prepaid funds and you no longer get access to them as they are taken off the capital balance permanently.

Instead what happens in real time is that your Interest Rate is calculated off the Capital Balance - Flexi Balance which means indirectly per month you'll safe 9.5% of X Prepaid Balance/12.


Something to bear in mind is that if you want to transfer money out it needs to be R1000+ and no less.

On this (the first statement) .. my new Flexi is debited less and less every month (and I didn't ask for anything from the bank's side).

Not a big change, it is is clearly visisble

 

[rodga]

On this (the first statement) .. my new Flexi is debited less and less every month (and I didn't ask for anything from the bank's side).

Not a big change, it is is clearly visisble

Mine was initially like this as well, I asked them to keep to the original payment amount afterwards

 

[zerocool2009]

Make sure you are informed with any decision regarding your felxi as this can have a severe impact on long term goals and financial planning

Reapply for prepaid funds no longer available, entails a credit assessment

 

[Mike Hoxbig]

Your Repayments don't get affected unless you ask them to re-calculate in which case they "lock in" all the Prepaid funds and you no longer get access to them as they are taken off the capital balance permanently.

Instead what happens in real time is that your Interest Rate is calculated off the Capital Balance - Flexi Balance which means indirectly per month you'll safe 9.5% of X Prepaid Balance/12.


Something to bear in mind is that if you want to transfer money out it needs to be R1000+ and no less.

Yip. This basically has the effect of more of your repayment going towards reducing the capital balance...

 

[NoviceDIYer]

From FNB's side, there are a few different flexi homeloans (meaning, they redesign flexi's time after time) and rules differ.

To answer the first email (from NoviceDIYer), if you put R100k in from day 1, your debit order will stays the same, and you will have R100k available, but you will save on interest.

Once you ask to review your bond (they will take the R100k prepaid into account), lower your bond but the R100k isnt available any more.

Related to debit orders :
If a debit order goes off, after 7 days, you can borrow against that debit order again (if that makes sense)

PM me if you want more info NoviceDIYer

Thank you - this helps a lot. I actually prefer this way than the other flexi option I had where I was having access to the capital amount paid off.

This way it’s really clear what your extra funds total to and you don’t dip into capital start mixing them up.

 

[Sehlakeng]

From FNB's side, there are a few different flexi homeloans (meaning, they redesign flexi's time after time) and rules differ.

To answer the first email (from NoviceDIYer), if you put R100k in from day 1, your debit order will stays the same, and you will have R100k available, but you will save on interest.

Once you ask to review your bond (they will take the R100k prepaid into account), lower your bond but the R100k isnt available any more.

Related to debit orders :
If a debit order goes off, after 7 days, you can borrow against that debit order again (if that makes sense)

PM me if you want more info NoviceDIYer

Afternoon NoviceDIYer

Out different FNB flexi Homeloans which one is the equivalent of standard bank pocket account.

Regards

Sehlakeng

 

[zerocool2009]

Afternoon NoviceDIYer

Out different FNB flexi Homeloans which one is the equivalent of standard bank pocket account.

Regards

Sehlakeng

what are you trying to compare ? A bond with a savings account ?

 

[Priapus]

Afternoon NoviceDIYer

Out different FNB flexi Homeloans which one is the equivalent of standard bank pocket account.

Regards

Sehlakeng

You can't compare apples to oranges. Completely different products.

 

[SauRoNZA]

If you want to see property as an actual investment set your repayment debit orders statically and well above what you should be paying and push it up whenever you can.

It not only helps your budget but stops you falling into the paying less, while actually paying much more trap.

Then pump it with everything you’ve got. Put your MSA in there, put your bonus in there, your emergency fund and your holiday savings and keep a spreadsheet.

It’s the best “paying” interest based investment you have.

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Be mindful you can only draw out in excess of R1000 at a time.


******

Damn necro’s.