Interest Rates Unchanged

Its too early in the year for a cut, but i def don't think it will go up anytime soon.
 
blunomore said:
What is that ?
Click to expand...

It's when you have already paid a large portion of your loan off... and you go back to them and tell them you want to borrow back up to the limit again. They re-advance you the amount that is difference between what you have already paid and what you originally borrowed. We want to use it for extensions and repairs.
 
I am glad there wasn't another cut. The pensioners are bleeding. Also, if they did cut now, it would mean a series of increases would have been in play a lot sooner. This way they can keep it at 9% for a lot longer.
 
I doubt the rates will drop any lower and if anything they'll probably start picking up end of the year and next year.
I decided to be pessimistic and factor in a 5.5% increase in the prime lending rate between now and July 2014 and used that in my debt repayment calculations.
I doubt it will increase more than 3% in the next 3.5 years but one never knows and it's better to be safe than sorry.
 
Expect rate hike this year - economist
Increasing risks to South Africa's inflation outlook was one of the warnings from Thursday's announcement of the Reserve Bank's Monetary Policy Committee meeting (MPC), with an economist saying that an interest rate hike could come as early as November this year.

"We believe that we will see the first hike in November," said Annabel Bishop, economist at Investec Group Economics.

"If the reserve bank does not increase rates at that stage, the real interest rate will fall below 1% which is not in line with what they have done historically," she added.

Risks to the inflation outlook, according to Reserve Bank governor Gill Marcus, are rapidly rising international oil and food prices.

Administered prices - which comprise electricity tariffs, petrol prices and wage increases, were highlighted as threats to consumer inflation.

As a result, the central bank has revised its inflation outlook higher to an average of 4.6% for 2011 and 5.3% for 2012 from 4.3% this year and 4.8% next year.

The forecast is in line with analysts' projections.

The MPC voted to leave the repo rate unchanged at 5.5%, keeping rates at a 30-year low.
Click to expand...
 
McT said:
I am glad there wasn't another cut. The pensioners are bleeding. Also, if they did cut now, it would mean a series of increases would have been in play a lot sooner. This way they can keep it at 9% for a lot longer.
Click to expand...

If pensioners are bleeding then it means that they did not make wise investment decisions.
A diversified portfolio is a must have, not one or two pension funds and retirement annuities.
Buy-to-let investments are one such vehicle. If the properties are paid off then even if the interest rates drop you're still getting income from the rent every month independent of interest and lending rates.

Gone are the days of a stable interest and inflation rates (not that they ever were very stable) - one cannot assume that everything is going to be rosy when you reach retirement age.
 
Right time to buy property before rates start going up. Will have to factor in all potential rates increases when deciding to purchase.
 
Garyvdh said:
It's when you have already paid a large portion of your loan off... and you go back to them and tell them you want to borrow back up to the limit again. They re-advance you the amount that is difference between what you have already paid and what you originally borrowed. We want to use it for extensions and repairs.
Click to expand...

So you basically go back to square one and once again, you will owe the bank the full loan amount over a 20 year period?

I understand your reason for wanting to do it, but psychologically it is just such a setback ... :)
 
blunomore said:
So you basically go back to square one and once again, you will owe the bank the full loan amount over a 20 year period?
I understand your reason for wanting to do it, but psychologically it is just such a setback ... :)
Click to expand...

Hehe! I don't understand that either.
I think I'd become seriously depressed if I had to see the outstanding balance on my bond increase up to the max limit again.
Then you're back working and living just to make the bank rich. I don't need that stress in my life.
No wonder why people retire with not enough money - they spend it living the life instead of investing for the future.
I know of people who are nearing retirement age and still owe a sizable amount of the original bond that was opened 35 years ago due to home improvements.
Not a good situation to be in.
 
blunomore said:
So you basically go back to square one and once again, you will owe the bank the full loan amount over a 20 year period?

I understand your reason for wanting to do it, but psychologically it is just such a setback ... :)
Click to expand...

Not really...the repayment term does not change only the monthly re-payments increase. Best time to do this is when the interest rates are coming down. You pay the same monthly installment but you get cash to do your improvements. Bearing in mind that home improvements can also increase the value of your property, it is not such a bat idea.
 
JungleBoy said:
Not really...the repayment term does not change only the monthly re-payments increase. Best time to do this is when the interest rates are coming down. You pay the same monthly installment but you get cash to do your improvements.
Click to expand...

Until the prime lending/interest rates go back up ...

Bearing in mind that home improvements can also increase the value of your property, it is not such a bat idea.
Click to expand...

Currently houses are under valued when compared to building prices so even if you add value to your house you're unlikely to be able to sell it any time soon at what it actually cost you to improve.
You'd be forced to sell at a loss unless you struck it lucky and found a generous buyer.
If you're planning on keeping the house long enough for the property market to improve then it's okay.
Anyway each to his own. 7 years from now I'm debt free and then I can make the bank work for me.
 
Paul_S said:
Until the prime lending/interest rates go back up ...



Currently houses are under valued when compared to building prices so even if you add value to your house you're unlikely to be able to sell it any time soon at what it actually cost you to improve.
You'd be forced to sell at a loss unless you struck it lucky and found a generous buyer.
If you're planning on keeping the house long enough for the property market to improve then it's okay.
Anyway each to his own. 7 years from now I'm debt free and then I can make the bank work for me.
Click to expand...

Yes it can get messy when the rates start going up. The worse part is that when rates go up the property prices start stagnating and God forbid should you be forced to sell at that time, you will make a loss.

BTW, you don't need to be debt free to make the bank work for you. It all depends on what you do with the money that you borrow from the bank. The key thing is never ever to borrow for your own consumption. Ideally, the house you live in, the car you drive for private use, etc, - they should not be financed.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X