Paying off Home Loan

etienne_marais

etienne_marais

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What are the penalties for paying of a home loan faster than the contract term ?

The extra payments is more or less a fixed sum every month rather than lump sums

Is there maybe a rule of thumb for not paying off too fast ?
 
etienne_marais said:
What are the penalties for paying of a home loan faster than the contract term ?

The extra payments is more or less a fixed sum every month rather than lump sums

Is there maybe a rule of thumb for not paying off too fast ?
Click to expand...
Paying off home loan but keeping account open will be no penalties

Paying off home loan and closing account immediately without giving 90 days notice will be 3 months interest as penalty
 
Others will chime in soon, in another thread it was advised to not pay the entire home loan off, IIRC something with sharing the risk with the bank or something??
 
My Dad bought our house in Pretoria in 1967 for and until his death in 1985 had R13 outstanding since about 1975.

Just leave a nominal amount in and they cannot basically do anything.
 
Hemi300c said:
My Dad bought our house in Pretoria in 1967 for and until his death in 1985 had R13 outstanding since about 1975.

Just leave a nominal amount in and they cannot basically do anything.
Click to expand...

Things to consider, the monthly service fee. That wont go away.

Every year, it cost more and more to get the bond cancelled.

If you think long term, and want to use the bond towards other things (its the cheapest money you can borrow)
 
etienne_marais said:
What are the penalties for paying of a home loan faster than the contract term ?

The extra payments is more or less a fixed sum every month rather than lump sums

Is there maybe a rule of thumb for not paying off too fast ?
Click to expand...
No penalties for pay it faster. Just you have to give them 3 months notice before you cancel it or you may face penalties for early cancellation.

But you can pay in lumpsums or extra every month without a problem.
 
Etienne,

I am likely the author of the other thread referenced above. I queried the same fairly recently, as I am hoping to pay mine off by mid year.

I will shortly be giving my bank three months notice of the final payment, and intend on cancelling the bond shortly thereafter.

As far as I'm aware, I can provide the notice via the app. You may be able to do the same.

If you pay it off in under three months, you will be penalised. If you give three months' notice, no problem.
 
If I remember correctly, there is a penalty on my bond if paid off within the first year so it may also depend on the banks. Best to read whatever you signed or ask your bank direct.
 
FNB and ABSA have cancelled their penalty early bond pay up years ago.

If you are with FNB just email them here :
[email protected]

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You should just leave your bond open, you can pay the full amount owing on your internet banking, your account will be zero but available will be your full bond amount give or take. Then all you pay each month is the account service fee, which mine was R50. So that R50 gives me access to a large sum of money that I can do whatever I want with.

You can't just pay up your bond to R0 and magically it's finished and the account closed, you have to advise them, they then send you tons of documents and actual figures etc, then you pay up.... then you have to pay a bond cancellation attorney a few grand etc, eventually it's all done and you will receive your title deeds.
 
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