Reasonable interest rate on a bond

[Smooth Criminal]

So I got a provisionally approved bond from SA Home Loans offering an interest rate of 9.3%. Is that a good rate for a first time buyer and is it worth applying at the banks?

 

[supersunbird]

So I got a provisionally approved bond from SA Home Loans offering an interest rate of 9.3%. Is that a good rate for a first time buyer and is it worth applying at the banks?

It's a smidge higher than my one with SA Homeloans but still is prime -0.7 which I think isn't too bad in the current climate.

 

[Herm]

That's not bad at all. I think it depends on the amount of the loan. Standard bank offered me prime (100% loan) FNB & SA Homeloans prime -0.5 (90% loan)

 

[wayfarer]

Standard Bank initially offered me prime (100% loan), then I asked whether that was their best offer. They then offered me prime -0,5. I said no thanks, then they said WAIT, prime -0,75 take it or leave it. So I said: It's a deal!

You have to haggle with them. In reality, I was not in a strong position to negotiate. In the case of Standard Bank, you have to phone SB Homeloans directly and twist the arm of the consultant dealing with your application.

 

[phoneJunky]

I got prime -0.55 from ABSA for a 90% loan and prime from Standard Bank 90% loan.

 

[Smooth Criminal]

That's not bad at all. I think it depends on the amount of the loan. Standard bank offered me prime (100% loan) FNB & SA Homeloans prime -0.5 (90% loan)

It's a 90% loan as well

What's swaying me towards them is the option to conveniently switch between their various payment plans. If things go bad in any particular month (unexpected expenses) then I can switch to their interest only plan, where you only pay the monthly interest and pay the rest of the installment when you have the cash. It's better than defaulting on a payment. I'm not sure if the banks are as accommodating.

 

[LottaFun]

This is in line but a bit different - At what date of the month does ABSA add interest to your bond?

 

[alt146]

Anything below 10% is a pretty good deal, the exact amount will vary according to the specifics of your bond.

 

[xrapidx]

I'm on a tiered loan - first R1,000,000 is at prime - 1.5% and any amount above that is prime -0.5%

 

[Paul_S]

How the hang did you guys get prime minus anything?!

Last year I got a bond from SAHL and they only gave me JIBAR +3.5% which is more or less equivalent to prime.
This is with a 20% deposit on an 850K house so I owe them less than 700K on the bond.
I have a half decent salary (wife as well) and both our credit records are very good.
Am I getting screwed?

Comes September (one year of paying the bond) I'm going to see if I can renegotiate else I'm going to see if I can refinance via one of the other banks.

 

[xrapidx]

Yip - I'm also waiting a year, I want -2% flat.