How much do you pay for rent?

cbrunsdonza said:
But not everybody is in the situation where they can buy a home.

Problem I had all my life as the issue was never if we could afford the bond, it's that the banks that had the issue.


That said my neighbour rents out her garage and it pays her bond.
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I hear you. I'm a contractor; so when I'm looking to buy might be an uphill battle.
 
Pho3nix said:
I hear you. I'm a contractor; so when I'm looking to buy might be an uphill battle.
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My wife is self employed and very successful. She has always earned double (sometimes even triple) my salary. It was easier to buy a house without getting her involved and that was my biggest frustration as I first had to wait for my salary to get to the point where we could buy a house.
 
I charge R4900, my bond after the interest rate increase is just over R4700.
So rental covers the bond and levies come out of my pocket. Property is financed over 20 years. It is a 2 bed 1 bath flat in pinelands, Cape Town.
 
OrbitalDawn said:
Just for interests' sake, over what period are most of your bonds financed?
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20 years is the standard. You will only get offered a 25 year if you are in your 20's but its not worth it as you the monthly repayment difference is only a couple of hundred rands.

Personally we will pay ours off over 10 years just by increasing the bond repayment amount by R500 a year.
 
OrbitalDawn said:
Just for interests' sake, over what period are most of your bonds financed?
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20 years is the standard. You will only get offered a 25 year if you are in your 20's but its not worth it as you the monthly repayment difference is only a couple of hundred rands.

Personally we will pay ours off over 10 years just by increasing the bond repayment amount by R500 a year.
 
cbrunsdonza said:
20 years is the standard. You will only get offered a 25 year if you are in your 20's but its not worth it as you the monthly repayment difference is only a couple of hundred rands.

Personally we will pay ours off over 10 years just by increasing the bond repayment amount by R500 a year.
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Why not? Unless one happens to suffer from weak discipline, the lowest required payment is optimal seeing how you can always pay more. Or what am I missing?
 
HavocXphere said:
Why not? Unless one happens to suffer from weak discipline, the lowest required payment is optimal seeing how you can always pay more. Or what am I missing?
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Why isn't it worth it or why wouldn't you get it?

It certainly isn't worth it because you would pay a fortune in interest for very little saving on a month to month basis.
 
Some banks offer 30 year deals now as well. I took this route purely from the banks affordability point of view but my house will be paid off in 10 years give or take. It also got me a lower interest rate initially
 
ToxicBunny said:
Some banks offer 30 year deals now as well. I took this route purely from the banks affordability point of view but my house will be paid off in 10 years give or take. It also got me a lower interest rate initially
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If I had known how the term affects the lending rate I'd have gone the 30 year route too.
It appears that the lending rate which a bank will offer you depends greatly on the amount of the money they will make from interest charged over the term of the loan and very little to do with your credit profile.
I've done some comparisons between friends and bonds of smaller amounts almost always get charged more interest that larger bonds regardless of credit scores.
 
Orihalcon said:
Location of this dream setup?
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Chevron said:
Can't be anywhere near a main city. Such a place in JHB would be double, if not triple that price.
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About a 25 minute drive from PTA central.
About 15 minutes from work.
Plot outside of Pretoria.

Been living here for a very long time, have a good relationship with the owner (she has so far even skipped the yearly increase a few times).
 
Paul_S said:
If I had known how the term affects the lending rate I'd have gone the 30 year route too.
It appears that the lending rate which a bank will offer you depends greatly on the amount of the money they will make from interest charged over the term of the loan and very little to do with your credit profile.
I've done some comparisons between friends and bonds of smaller amounts almost always get charged more interest that larger bonds regardless of credit scores.
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Whether they will give you the bond depends on your credit profile, the amount of profit they will make off you over the term determines the interest rate.
 
ToxicBunny said:
Whether they will give you the bond depends on your credit profile, the amount of profit they will make off you over the term determines the interest rate.
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It's a scam though.
Why should poor people with smaller bonds be charged higher interest rates than rich people with larger bonds?
I understand the banks are just trying to make money but yet again it's the poor who suffer more.
 
Paul_S said:
It's a scam though.
Why should poor people with smaller bonds be charged higher interest rates than rich people with larger bonds?
I understand the banks are just trying to make money but yet again it's the poor who suffer more.
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Oddly enough (not that I'm defending the banks)...

I would guess they have an algorithm that will calculate netprofit or some such thing after they've decided to give the bond, and that algorithm will determine the interest rate.

I very much doubt that the decision is human based, or at least initially its not human based.
 
HavocXphere said:
Why not? Unless one happens to suffer from weak discipline, the lowest required payment is optimal seeing how you can always pay more. Or what am I missing?
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My 20yr bond repayment is R 6 227, over 25 years it would only be R 5 836. Not much of a difference. R5K of that amount is currently interest.

And while you mention weak discipline, its human nature and especially the younger you are, to rather pay the min amount.
 
Paul_S said:
It's a scam though.
Why should poor people with smaller bonds be charged higher interest rates than rich people with larger bonds?
I understand the banks are just trying to make money but yet again it's the poor who suffer more.
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Its all about risk and supply & demand.

What I learn't when I got my bond is that the banks change their lending criteria all the time. I bought during a bad time where getting close to prime was unheard of. I got prime + 0.5% and that was one of the best rates my bond originator saw that month. (I was getting offers of prime+4%).

Then you need to consider risk for the banks: banks check your loan-to-value and if your property is worth more than the true market value, its less risk to them and you get a better deal. With high demand in the entry level market, most people buy at a 100% LTV and banks consider this high risk.

Also when there is a big demand for bonds, they are stricter with their lending criteria.
 
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