Homeloan Interest Rates

beefymoocow

Well-Known Member
Joined
Jun 19, 2006
Messages
462
They use that 2 year nonsense just to buy time. When you call them back after 2 years they have a new excuse. Money talks and all the banks care about is losing the deal which means you need to go through the effort of getting additional quotes from other banks.
Bring in a cheaper rate and FNB will match on the spot, 2 years or not.
Thanks I’ll try that if it doesn’t work I’ll just leave like R15k on the home loan until my bond is 2 years old and if they still give excuses. I’ll just close it and open a 2nd standard bank homeloan since my brother gets prime -2.5. We been destroying our fnb homeloan each month cause the interest is fairly high for our credit risk.
 

Thor

Honorary Master
Joined
Jun 5, 2014
Messages
36,890
Considering we are now in year 10 since the last financial crisis.

What happens to our home loan interest if the next crisis where to hit us?
 

beans100

Honorary Master
Joined
Jul 30, 2010
Messages
10,427
Exactly what I did.

Nedbank offers 30 years, so I took it to get a LOWER interest rate. Then I just paid it off quickly as originally planned.

The bank assumes that they will have you as a client for an extra decade and uses a lower interest rate to attract your business. You're quite correct.
How did you do that? Nedbank's maximum term is 25 years, or at least that's what they told me. Got a loan from them last year, on 25 years at 10.15%.

EDIT: Here: LINK
You may request a shorter loan term or a maximum term of up to 25 years
Reason I went with them, was because they gave me the best interest. But couldn't get them to go for 30 years. The other banks gave me 30 years, with lower installment, but interest was bad. Even my own bank, FNB, gave me over 11%.
 

bromster

Expert Member
Joined
Nov 2, 2012
Messages
4,307
How did you do that? Nedbank's maximum term is 25 years, or at least that's what they told me. Got a loan from them last year, on 25 years at 10.15%.

EDIT: Here: LINK

Reason I went with them, was because they gave me the best interest. But couldn't get them to go for 30 years. The other banks gave me 30 years, with lower installment, but interest was bad. Even my own bank, FNB, gave me over 11%.
That's interesting.

I had a large chunk of money in my savings account which was with them, as I stated.

All I can think is that I was buying close to my affordability limit, so they gave me 30 years so that I could qualify. Naturally they didn't want to lose that money to a competitor.

But I'm definitely on 30 years, so it's definitely feasible.
 

zerocool2009

Expert Member
Joined
Sep 4, 2009
Messages
2,808
Considering we are now in year 10 since the last financial crisis.

What happens to our home loan interest if the next crisis where to hit us?
Its very easy ... pay as much as possible into your bond (killing it)
 

WAslayer

Expert Member
Joined
May 13, 2011
Messages
3,205
Considering we are now in year 10 since the last financial crisis.

What happens to our home loan interest if the next crisis where to hit us?
If you don't go for or get a fixed interest rate, your monthly installment increases or decreases as prime rate goes up and down.. since Feb 2016 when I first started paying my bond, my installment has gone up and down 4 times or so i think..
 

Thor

Honorary Master
Joined
Jun 5, 2014
Messages
36,890
If you don't go for or get a fixed interest rate, your monthly installment increases or decreases as prime rate goes up and down.. since Feb 2016 when I first started paying my bond, my installment has gone up and down 4 times or so i think..
I suppose knowing a crisis is around the corner a fix rate is probably safest also considering South Africa will be very different in 10 years time and history shows out prime rate only goes up.
 

zerocool2009

Expert Member
Joined
Sep 4, 2009
Messages
2,808
I suppose knowing a crisis is around the corner a fix rate is probably safest also considering South Africa will be very different in 10 years time and history shows out prime rate only goes up.
My rule is simple .... put all you can into your bond (and you will save in the long run) ...

Why fix it and pay at least 2% higher than the norm (as you can be pro-active and wise)
 

Thor

Honorary Master
Joined
Jun 5, 2014
Messages
36,890
My rule is simple .... put all you can into your bond (and you will save in the long run) ...

Why fix it and pay at least 2% higher than the norm (as you can be pro-active and wise)
You don't understand the question at hand. Do you know what effect a financial crisis will have on your repayments?

In 2008 the repo rate went from 9 to 15% that's enough for majority of bonds to default as people won't have the money to pay.
 

zerocool2009

Expert Member
Joined
Sep 4, 2009
Messages
2,808
You don't understand the question at hand. Do you know what effect a financial crisis will have on your repayments?

In 2008 the repo rate went from 9 to 15% that's enough for majority of bonds to default as people won't have the money to pay.
In 2008/2009 it was max at 12% actually.

All I am saying, prepay your bond

And I totally understand the question on hand
 

WAslayer

Expert Member
Joined
May 13, 2011
Messages
3,205
I suppose knowing a crisis is around the corner a fix rate is probably safest also considering South Africa will be very different in 10 years time and history shows out prime rate only goes up.
Fix rate is probably safest but, banks tend to give you a higher rate if you go fixed as opposed to linked.. at least what I saw in my quotes four years ago..

I stand corrected on this: If you are paying extra into your bond, when financial crisis hits, you most probably would be able to ask the bank to re-capitalize your bond based on the extra you have paid in and that may be enough to drop your installment to the same or less than it was before any interest rate hikes..
 

zerocool2009

Expert Member
Joined
Sep 4, 2009
Messages
2,808
Fix rate is probably safest but, banks tend to give you a higher rate if you go fixed as opposed to linked.. at least what I saw in my quotes four years ago..

I stand corrected on this: If you are paying extra into your bond, when financial crisis hits, you most probably would be able to ask the bank to re-capitalize your bond based on the extra you have paid in and that may be enough to drop your installment to the same or less than it was before any interest rate hikes..
How FNB works ... if you prepay your bond, and you want to review / lock funds in to reduce your debit order, it it doable (and then you can ask to unlock you locked funds).
 

zerocool2009

Expert Member
Joined
Sep 4, 2009
Messages
2,808
Just shy of 40% of purchase price.
I seriously dont know why people put so much down to buy property.

If you put a large lump sum down, you CANT ever re-use it towards future things.

If you want to be wise, get a bond, put max 10% down, get it on your name and put the other money in (asking to be a flexi bond).

Saying that, you can use the prepaid bond's money to buy more property and re-gear, or a car, or a holiday ...
 

Neuk_

Expert Member
Joined
Jan 23, 2018
Messages
1,310
I seriously dont know why people put so much down to buy property.

If you put a large lump sum down, you CANT ever re-use it towards future things.

If you want to be wise, get a bond, put max 10% down, get it on your name and put the other money in (asking to be a flexi bond).

Saying that, you can use the prepaid bond's money to buy more property and re-gear, or a car, or a holiday ...
In hindsight that is what we should have done but you live and learn. We have put other available funds from selling a flat my girlfriend used to rent out in to the bond so we owe less than 30% of the original bond amount.
 

grim101

Well-Known Member
Joined
Jun 25, 2013
Messages
287
Response from Standard bank.

Kindly be advised that as this is an existing account, interest rate is not reviewed after the registration of the bond. You have agreed to the terms and conditions of the bond including the interest rate.
 

Pitbull

Verboten
Joined
Apr 8, 2006
Messages
61,966
Response from Standard bank.

Kindly be advised that as this is an existing account, interest rate is not reviewed after the registration of the bond. You have agreed to the terms and conditions of the bond including the interest rate.
Shop around and move, see how quickly they change their tune ;)
 

grim101

Well-Known Member
Joined
Jun 25, 2013
Messages
287
If you move. Do you have to pay all the fees again? Do they add them to your loan?
 
Top