Switching Bonds

[MusicalMan]

Hi Everyone
What is involved with switching a bond from one bank to another, specifically from Nedbank to Absa
Current have a bond with Absa and one with Nedbank.
My "main" bank is Absa
I figured move the Nedbank one to Absa, maybe get a better rate?
What costs should I be aware of?


Thanks

 

[3WA]

New bond registration fee: ask Absa if they'll pay some or all of it if you switch to them.
Give sufficient notice for settling your Nedbank bond otherwise you might get a penalty fee.
Get quotes from other banks even if you don't plan to use them, since it will give you bargaining power on the interest rate.

 

[MusicalMan]

New bond registration fee: ask Absa if they'll pay some or all of it if you switch to them.
Give sufficient notice for settling your Nedbank bond otherwise you might get a penalty fee.
Get quotes from other banks even if you don't plan to use them, since it will give you bargaining power on the interest rate.

The notice thing is where I am confused
I believe Nedbank has a 90 day notice period. What is Absa approves the move to them within that 90 days, that means I'm going to pay a penalty?
Kind of have to get Absa to only approve after the 90 days?

 

[3WA]

The notice thing is where I am confused
I believe Nedbank has a 90 day notice period. What is Absa approves the move to them within that 90 days, that means I'm going to pay a penalty?
Kind of have to get Absa to only approve after the 90 days?

Easiest way would be to give Nedbank notice now and then only start processing with Absa after 2 months.

Also check your contract, the penalty is usually 3-months interest, and if it is pro-rated, giving slightly less than three months can result in a very small fee to the point where it won't concern you too much.

 

[MusicalMan]

Easiest way would be to give Nedbank notice now and then only start processing with Absa after 2 months.

Also check your contract, the penalty is usually 3-months interest, and if it is pro-rated, giving slightly less than three months can result in a very small fee to the point where it won't concern you too much.

Thanks
Yep - Just read there cancellation story. It is 3 month's interest.
I was under the impression that you give the 90 days notice and then if you have not gotten approval elsewhere, it leaves you in kind of no-mans land - I was wrong. The 90 days thing is valid for a year.

 

[AxField]

Edit: never mind. I read “Switching Blondes”

 

[Cactus]

Are you really sure you want to do this? As stated, there's bond registration fees, but there's also lawyer fees as it's a legal process.

I moved from one bank to another a while ago and even though I got a lower rate I still had to fork out ~20k for everything, so be very sure you actually want to do this. It's easy to add that 20k to your loan, but then you just end up screwing yourself.

 

[Snyper564]

Don't move your bond just use the better rate to let your current bank best it.

Absa beat fnb took to fnb fnb matched stayed at fnb with almost 1% less.

 

[MusicalMan]

Are you really sure you want to do this? As stated, there's bond registration fees, but there's also lawyer fees as it's a legal process.

I moved from one bank to another a while ago and even though I got a lower rate I still had to fork out ~20k for everything, so be very sure you actually want to do this. It's easy to add that 20k to your loan, but then you just end up screwing yourself.

I'm thinking a better rate will help me in the long run?
I don't actually want to decrease my installment, I want to leave it as is and with a better rate, pay the bond off quicker.

 

[MusicalMan]

Don't move your bond just use the better rate to let your current bank best it.

Absa beat fnb took to fnb fnb matched stayed at fnb with almost 1% less.

Is it possible to negotiate a better rate with your bank?

So, get an offer from Absa with a better rate, send that to Nedbank to better it?

 

[Cactus]

Is it possible to negotiate a better rate with your bank?

So, get an offer from Absa with a better rate, send that to Nedbank to better it?

That depends on your negotiation skills

I'm thinking a better rate will help me in the long run?
I don't actually want to decrease my installment, I want to leave it as is and with a better rate, pay the bond off quicker.

It depends. If you decide to move, and you can't front the registration + legal fees, then that odd 20k goes on top of your loan, and you pay interest on it. You will have to make that calculation yourself to determine if the lower rate would offset the costs involved in moving.

 

[Snyper564]

Is it possible to negotiate a better rate with your bank?

So, get an offer from Absa with a better rate, send that to Nedbank to better it?

I guess but I would rather stay with current bank than do all the changes etc.

 

[MusicalMan]

That depends on your negotiation skills


It depends. If you decide to move, and you can't front the registration + legal fees, then that odd 20k goes on top of your loan, and you pay interest on it. You will have to make that calculation yourself to determine if the lower rate would offset the costs involved in moving.

Thanks
Absa said that the costs would be R21k without the discount. I don't mind forking that out if I'm saving in the long run