Home Loan lump sum and additional installments

[nexxus]

With SBSA my debit-amount stays more or less the same and interest portion deducts after putting in a lump sum last year. I think interest will go up by 2% by end of the year and it would be not wise to shorten loan-term and rather keep putting more money in.

Not sure what you mean here, if your payment is in excess there's only one of 2 possible outcomes. Either your minimum payment declines or your term does, if you've fixed the debit amount then the term *must* go down, there's no other choice. Anyway, the game isn't to lower the term length, it's the amount owed.

If you're quite early into your loan, most of the repayments go towards paying interest anyway so unless your repayment is a whopper you won't see much of a change in your minimum repayment amount. Is that what you mean by more-or-less the same?

I stand to be corrected, but for me, the point would be to shovel as much money into the loan as possible before any interest rate spike to gain the maximum effect. Any amount above the interest portion is applied to the capital in any event.

 

[nexxus]

Each day: outstanding balance * interest rate / days per year.
This amount is added up into one interest payment made per month.

Basically it means you earn interest "credits" from the day you make an extra deposit into the account.

So it's compounded per day? Rotten money grubbing buggers.

 

[Sinbad]

So it's compounded per day? Rotten money grubbing buggers.

No.
Compounded per month. Remember the interest isn't charged to your account daily - so the balance does not increase daily.

 

[nexxus]

Right, so it really is just my rubbish maths that says I should be done in 6 years rather than the 8 the consultant estimated.

Still rotten money grubbing buggers though, but ever so slightly less so.

 

[Sinbad]

Right, so it really is just my rubbish maths that says I should be done in 6 years rather than the 8 the consultant estimated.

Still rotten money grubbing buggers though, but ever so slightly less so.

lol

hey, gotta pay my bonus somehow... (so I can give it right back to them)

 

[nexxus]

Sadfact: I've never had a bonus, my home loan however has received 2.

 

[reactor_sa]

I couldn't find an email address to email Nedbank so I phoned them. They said the lump sum payments are deducted from the capital. The installment stays the same unless you ask to have it recalculated. Still doesn't make sense that the interest charge hasn't changed more than r100 or so.

 

[nexxus]

Ok. ABSA definitely lowered my monthly debit order until I phoned them and told them to fix it.

Just a point to note regarding that though, the consultant did let me know that if I were in a position where my fixed debit order is actually less than the required minimum, it's now up to me to tell them to change it. I suppose that's fair enough.

 

[Sepeng]

Ok. ABSA definitely lowered my monthly debit order until I phoned them and told them to fix it.

Just a point to note regarding that though, the consultant did let me know that if I were in a position where my fixed debit order is actually less than the required minimum, it's now up to me to tell them to change it. I suppose that's fair enough.

Would you happen to know, with ABSA, if you have your bond linked on internet banking, can you simply do an internal transfer to your bond for adhoc payments? And if so, I'm assuming you'd have to then let them know exactly what to do with it (e.g go towards capital, keep debit order the same amount)?

 

[Jehosefat]

Would you happen to know, with ABSA, if you have your bond linked on internet banking, can you simply do an internal transfer to your bond for adhoc payments? And if so, I'm assuming you'd have to then let them know exactly what to do with it (e.g go towards capital, keep debit order the same amount)?

I don't know about ABSA specifically, but with 3 other banks (FNB, Nedbank and Investec) any ad hoc transfers were reflected against the capital balance and the debit orders did not change.

 

[Sepeng]

I don't know about ABSA specifically, but with 3 other banks (FNB, Nedbank and Investec) any ad hoc transfers were reflected against the capital balance and the debit orders did not change.

Thanks for this, appreciated!

 

[Cray]

Standard Bank Access bond they keep the term the same. They seem to re-evaluate the monthly debit order every 6 months or so. The interest charge would reduce every month but the monthly debit would only adjust every 6 months or s - I imagine you could phone them to keep it constant if you wanted to...

 

[nexxus]

I would think the bank would default to keeping you on the 20yr term. The longer you take to pay off the loan the more they're going to make.

 

[Viper25]

Bringing up a bit of an oldish thread, but just a question. I have the flexi reserve type home loan with Absa.
I occasionally deposit money into it. However when I make a withdrawal, my fixed monthly repayment always goes up.
Is this correct? or is something strange going on?

 

[air]

Bringing up a bit of an oldish thread, but just a question. I have the flexi reserve type home loan with Absa.
I occasionally deposit money into it. However when I make a withdrawal, my fixed monthly repayment always goes up.
Is this correct? or is something strange going on?

I would have thought the amount stays he same, but the capital vs interest ratio changes...

 

[The Philosopher]

I have a homeloan with FNB, and when I paid a lumpsum payment back, I had to fill out a form requesting a new premium calculation. Meh, I was not impressed.