Your inflation rate...

[kaspaas]

What was your inflation rate over the past year?

Maybe take just a few easily checkable items:

Housing (Bond, rental, insurance)
Rates, taxes, levies
Vehicle
Medical aid
Government tax


will check mine when I'm back at the real office in a few weeks.

 

[andres101]

Housing (Bond, rental, insurance) - 0% - I already pay more into my bond than I need to
Rates, taxes, levies - 0% - Levies decreased by the same amount as rates increased
Vehicle - 0% - Travel more with motorcycle, so using less fuel. No debt.
Medical aid - 0% - No medical aid
Government tax - 0%

Food - +/-50%

 

[rsachoc]

Housing (Bond, rental, insurance) - 0% - I already pay more into my bond than I need to
Rates, taxes, levies - 0% - Levies decreased by the same amount as rates increased
Vehicle - 0% - Travel more with motorcycle, so using less fuel. No debt.
Medical aid - 0% - No medical aid
Government tax - 0%

Food - +/-50%

Thats risky, why do you choose not to have medical aid?

 

[springbokkie]

But then that products/services needs to be allocated into %.

 

[Moederloos]

At least 20%. I tried to work it out a while back, but it is hard to do.

Easiest method is to take what I spent (salary - debit orders - withdrawals) then and now.

 

[noxibox]

Housing (Bond, rental, insurance) - 0% - I already pay more into my bond than I need to

How is it that your interest rate has not gone up?

Vehicle - 0% - Travel more with motorcycle, so using less fuel. No debt.

You're now using a more efficient vehicle? Or does your motorcycle improve its fuel consumption exactly the right amount to balance the increased price of fuel?

 

[HavocXphere]

The CPI is a fairly accurate estimate of the real world situation imo.

 

[milomak]

noxi - when rates go up (or down), my guess is that the bank determines the installment on what capital is outstanding and on when the original maturity of the loan was. So it stands to reason that depending on how much extra you put in, even with rising rates your installment can fall.

I suppose one could make an arrangement with the bank that what you want to change is not the installment amount but when the maturity is due. From my understanding of banks, they prefer to match asset/liability flows rather than keep installment amounts the same. So my guess would be that they would charge you a premium for keeping the installment the same.

 

[milomak]

The CPI is a fairly accurate estimate of the real world situation imo.

On a national average basis it probably is about the fairest measure to have. But on an individual basis it will be very different from person to person.

 

[noxibox]

when rates go up (or down), my guess is that the bank determines the installment on what capital is outstanding and on when the original maturity of the loan was. So it stands to reason that depending on how much extra you put in, even with rising rates your installment can fall.

If the interest rate goes up you're going to be paying more interest.

 

[springbokkie]

If the interest rate goes up you're going to be paying more interest.

Unless you were clever enough to fix it 2 years back at 10.5%! I didn't...

 

[noxibox]

Unless you were clever enough to fix it 2 years back at 10.5%! I didn't...

Fixing your rate isn't necessarily a solution. Fixed rates are usually higher than the prevailing prime rate. Especially in a situation where the banks are fairly certain it is going to continue to rise.

 

[milomak]

If the interest rate goes up you're going to be paying more interest.

the question with regard to his inflation pointed towards his total installment, not just the interest component. In theory, when rates move up the banks can either adjust the time to final payment or the installment amount. It is possible that because he has been paying in more, the bank decided to leave his installment the same and increase the time to final payment. If that is the case he would have the same installment and thus 0% inflation on his bond repayments.

whether this is what has happened the poster will have to explain.

 

[milomak]

Fixing your rate isn't necessarily a solution. Fixed rates are usually higher than the prevailing prime rate. Especially in a situation where the banks are fairly certain it is going to continue to rise.

Given the current shape of the yield curve, if you were to fix your bond for 20 or 30 years (if SA banks offered such long tenure), the banks should offer you a rate lower than current prime. Given most people are not aware of the shape of the yield curve, it is likely that banks would in fact not offer many a lower rate than current prime.

You can see this by looking at interest rate swap yields if you have access to a resource that shows them. The Business Day might. I'm not sure.

 

[andres101]

Thats risky, why do you choose not to have medical aid?

I'm still young and would rather save that amount and pay for medical expenses. Once I have a family, I would consider joining a medical aid again. I also do not have life insurance... please, no speeches, I know the risks!

How is it that your interest rate has not gone up?

My interest rate has gone up, but instead of paying the amount payment my bank suggested, I decided to pay amount*1.5. So repo rate has to shoot to +/-25% before they have to increase my bond payment.

You're now using a more efficient vehicle? Or does your motorcycle improve its fuel consumption exactly the right amount to balance the increased price of fuel?

I am using the motorcycle more often and using the car less often.