Mortgage interest rate expiration?

A

anon275

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Bought a property May 2019 and have been paying diligently (including extra R2k/month on average). Variable interest rate: prime -0.1. Absa sent a letter this month saying that my interest rate will expire next month and the new interest will be prime +0.05. Just seems fishy that they'd suddenly increase it. Has anyone else experienced this?
 
anon275 said:
Bought a property May 2019 and have been paying diligently (including extra R2k/month on average). Variable interest rate: prime -0.1. Absa sent a letter this month saying that my interest rate will expire next month and the new interest will be prime +0.05. Just seems fishy that they'd suddenly increase it. Has anyone else experienced this?
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Shop around and use it to force them to keep the rate.
SA Home loans etc
 
Read your contract/loan agreement with ABSA. Does it state that interest change after 18 months?

Odd, I just assumed the interest rate if for life of the bond. Never had a midway change.
 
Quintrix said:
Read your contract/loan agreement with ABSA. Does it state that interest change after 18 months?

Odd, I just assumed the interest rate if for life of the bond. Never had a midway change.
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I thought so too. I don't recall signing a contract. Only receive their mortgage offer and there's nothing in there about the interest changing. I'll ask them for a copy of the contract though.
 
anon275 said:
I thought so too. I don't recall signing a contract. Only receive their mortgage offer and there's nothing in there about the interest changing. I'll ask them for a copy of the contract though.
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You signed it at the attorneys.

Interest rates change when the repo rate changed, except for SA homeloans who work on the Jibar rating system.

Ask for clarification. Your R2k prepaying your flexi have more power in time than the increase. Just continue with it or increase it
 
Lupus said:
So he'll need to pay transfer fees and such??
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Only in some instances, and even if he does, often the cost of switching to a decent rate will absorb it in the long term.
 
anon275 said:
I thought so too. I don't recall signing a contract. Only receive their mortgage offer and there's nothing in there about the interest changing. I'll ask them for a copy of the contract though.
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It may be that you opted to fix the rate for 18 months, and now it is coming up for review. Ask for a copy of the contract which you signed.
 
RonSwanson said:
Only in some instances, and even if he does, often the cost of switching to a decent rate will absorb it in the long term.
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I agree. Especially since the bond is fairly new. The better interest rate will be more beneficial. I would get quotes from all the banks and send to absa to beat, not match but beat.
 
So just an update from the bank. Apparently it was a "system error" and myself and others were never supposed to receive the email in the first place. They said the rate didn't actually change, it was just an email but a week ago they said "the expiry date has been removed".
 
Glad to hear your mortgage interest rate is still intact despite the email chaos. It's like a rollercoaster of updates, right? Hopefully, everything is smooth sailing from here on out. If ever in need of expert advice or a second opinion, there's always the option to connect with a Mortgage Broker in Chester. They might offer some valuable insights and assistance. Wishing you a stress-free mortgage journey ahead!
 
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