Should i get a home loan on prime plus?

C

Corelli

Expert Member
Joined
Jun 20, 2008
Messages
3,661
I got prime from std bank with a 1/3 deposit.

But after 7 years my property value went from 700k to 2.4 million.
 
Hamster

Hamster

Resident Rodent
Joined
Aug 22, 2006
Messages
42,928
You can go do the calculations yourself and compare but to give you an idea, consider a R1.000.000 loan over 240 months:

7%
Monthly Payment:R7,752.99
Number of Payments:240
Cumulative Payment:R1,860,717.26
Total Interest:R860,717.26

8.78%
Monthly Payment:R8,856.26
Number of Payments:240
Cumulative Payment:R2,125,501.32
Total Interest:R1,125,501.32

Unless there is a property boom coming this is a long term money losing scheme especially if you consider the other costs associated with home ownership (bond initiation, transfer attorneys, SARS and ongoing maintenance).

Dead honest when I say in South Africa, especially Gauteng, you are better off renting and applying financial discipline to saving and investing. You'll be better off.
 
Snyper564

Snyper564

Honorary Master
Joined
Oct 1, 2008
Messages
15,343
That's almost prime plus 2 that is very very high. My credit card is prime minus..which is irrelevant but nonetheless that's very high.

Don't rush into this. Get your finances in order rent for 2 or 3 more years. That kind of interest rate will set you back 5 to 10 years financially
 
Last edited:
S

Superman-7

Senior Member
Joined
Jul 29, 2018
Messages
632
MartinNT said:
Is 8.78 % home loan interest rate on 7 % prime rate very bad?
Click to expand...
Too high. I personally have never settled for anything less than below prime. Have the banks duel it out for your business. I bank with ABSA and they have always lowered their first offer after I presented FNB's offer to them.
 
Snyper564

Snyper564

Honorary Master
Joined
Oct 1, 2008
Messages
15,343
Superman-7 said:
Too high. I personally have never settled for anything less than below prime. Have the banks duel it out for your business. I bank with ABSA and they have always lowered their first offer after I presented FNB's offer to them.
Click to expand...
This but starting off at prime plus 2 doesn't mean you going to get anywhere near prime or prime less, even letting them dual it out. Likely high risk credit profile already
 
D

Dee96

Expert Member
Joined
Oct 12, 2011
Messages
1,451
Snyper564 said:
That's almost prime plus 2 that is very very high. My credit card is prime minus..which is irrelevant but nonetheless that's very high.

Don't rush into this. Get your finances in order rent for 2 or 3 more years. That kind of interest rate will set you back 5 to 10 years financially
Click to expand...
Hi

Which bank offers credit cards at prime minus?
 
M

MartinNT

New Member
Joined
Apr 4, 2021
Messages
2
I made an uninformed decision and accepted standard bank home loan offer and I realised that I should have accepted nedbank offer. Am I allowed to cancel STD and accept nedbank offer. The sales agent is telling it’s too much paperwork involved and seem not interested in explaining to me
 
Snyper564

Snyper564

Honorary Master
Joined
Oct 1, 2008
Messages
15,343
MartinNT said:
I made an uninformed decision and accepted standard bank home loan offer and I realised that I should have accepted nedbank offer. Am I allowed to cancel STD and accept nedbank offer. The sales agent is telling it’s too much paperwork involved and seem not interested in explaining to me
Click to expand...
It's a contract think it will cost you to break it
 
N

Not_original

Expert Member
Joined
Apr 10, 2013
Messages
2,264
Snyper564 said:
That's almost prime plus 2 that is very very high. My credit card is prime minus..which is irrelevant but nonetheless that's very high.

Don't rush into this. Get your finances in order rent for 2 or 3 more years. That kind of interest rate will set you back 5 to 10 years financially
Click to expand...
how on earth did you get a cc on prime minus ?
 
N

Not_original

Expert Member
Joined
Apr 10, 2013
Messages
2,264
For my home I'm currently paying prime +0.6 and my rental property sitting at prime
Looking to start refinancing with Nedbank on Tuesday which said that they are "open to negotiation" through an agent text chat I had when asking for the relevant paperwork to be sent.

Think I can squeeze them for prime - 1.5 ?
 
Snyper564

Snyper564

Honorary Master
Joined
Oct 1, 2008
Messages
15,343
gertvanjoe said:
Thats a credit balance meaning you have money in the account just sitting there doing nothing and not using the credit card to pay for things with their money . Correct me if I'm wrong though
Click to expand...
I use the credit card during the month and always settle it month end. They show the rate for if you have additional funds in it being the 0.25% and the 6% if you owe them after 55 days.

I never ever use the credit card as a savings account that 0.25% is a joke that's just what you would get if you did.

You also asked how I got it. I never asked for it that was just the rate I was given
 
N

Not_original

Expert Member
Joined
Apr 10, 2013
Messages
2,264
Snyper564 said:
I use the credit card during the month and always settle it month end. They show the rate for if you have additional funds in it being the 0.25% and the 6% if you owe them after 55 days.

I never ever use the credit card as a savings account that 0.25% is a joke that's just what you would get if you did.

You also asked how I got it. I never asked for it that was just the rate I was given
Click to expand...
Oh nice ok
 
Hamster

Hamster

Resident Rodent
Joined
Aug 22, 2006
Messages
42,928
gertvanjoe said:
Looking to start refinancing with Nedbank on Tuesday which said that they are "open to negotiation"
Click to expand...
Just keep in mind that you'll pay bond cancellation fees (R5000 odd) and the new bond attorneys. The lawyer might negotiate by offering you a lower bond registration fee but it will most likely still be North of R25k.

Life would be much more pleasant without these admin "paper pusher" lawyers sucking us dry.
 
You must log in or register to reply here.
Top