Some assistance with bond repayment / amortisation

blunomore

blunomore

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My better half is responsible for part of a bond - his liability is R 270K to be exact.

He has been repaying for a while now, but he has not paid any interest and he has not adjusted his payment according to interest rate hikes.

His current situation is therefore that he owes R315K (this includes the capital plus costs plus interest). Talk about a disaster. We did not pay much attention to this, because this bond is not on our property and we obviously prefer paying off our own property first.

Nevertheless, we want to rectify this.

Is there a way that one of you clever people can calculate how many payments (months) it will take him to pay this off if he changes his monthly repayment amount to R 3 000 ?

Thanks
 
On the assumption that the interest rate is 10%pa (approximate current rate depending on bank) it would take 251 (21years) months to repay R315 000.

That also assumes there are no other charges such as admin fees or insurance raised against the bond.
 
blunomore said:
Sure, I understand that, so is the only option to calculate it at the current interest rate and give us a broad / vague idea?
Click to expand...

No. The only option is to find out the terms of the financing, from interest rate to early termination penalties if applicable etc. It's not possible to calculate without knowing the interest rate though. Also, what is the capital amount outstanding, excluding interest?
 
mikef said:
On the assumption that the interest rate is 10%pa (approximate current rate depending on bank) it would take 251 (21years) months to repay R315 000.

That also assumes there are no other charges such as admin fees or insurance raised against the bond.
Click to expand...

I calculate 208 payments at prime...:confused:
 
The interest rate is prime minus 2.

The term left on the loan is 17 years and 8 months.

Thanks for assisting.
 
blunomore said:
The interest rate is prime minus 2.

The term left on the loan is 17 years and 8 months.

Thanks for assisting.
Click to expand...

I calculate 158 regular payments at current rates...

Seeing as the payment is early, double check that there are no early penalty clauses...
 
DJ... said:
I calculate 158 regular payments at current rates...

Seeing as the payment is early, double check that there are no early penalty clauses...
Click to expand...

Not sure how you calculate this. For a PV= R315000 PMT=R3000 and Rate=8%pa (prime of 10% less 2%) then the remaining number of payments = 182. Alternatively to repay the loan in the remaining term of 17 years and 8 months the payment would be R2780 per month if rates stay the same.
 
Last edited:
mikef said:
Not sure how you calculate this. For a PV= R315000 PMT=R3000 and Rate=8%pa (prime of 10% less 2%) then the remaining number of payments = 182. Alternatively to repay the loan in the remaining term of 17 years and 8 months the payment would be R2780 per month if rates stay the same.
Click to expand...

My apologies. I was using an incorrect assumption based on the OP.

You are correct, I also get 182 payments...
 
mikef said:
Not sure how you calculate this. For a PV= R315000 PMT=R3000 and Rate=8%pa (prime of 10% less 2%) then the remaining number of payments = 182. Alternatively to repay the loan in the remaining term of 17 years and 8 months the payment would be R2780 per month if rates stay the same.
Click to expand...

DJ... said:
My apologies. I was using an incorrect assumption based on the OP.

You are correct, I also get 182 payments...
Click to expand...

Thanks very much, guys.
 
For future reference , I have used this online calculator for the past 5 years and love it, especially when you learn how to tweak things and see results in real life , makes it rewarding:
http://www.drcalculator.com/mortgage/

Not the prettiest interface, but it does the trick very accurately.
Hint: You dont have to use the sliders, you can enter any data in the bottom.
 
ant101 said:
For future reference , I have used this online calculator for the past 5 years and love it, especially when you learn how to tweak things and see results in real life , makes it rewarding:
http://www.drcalculator.com/mortgage/

Not the prettiest interface, but it does the trick very accurately.
Hint: You dont have to use the sliders, you can enter any data in the bottom.
Click to expand...

Thanx!
 
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