Understand your bond repayment.
Start with your actual quote.
The example interest rate is not a current prime rate or a lender offer. Enter the nominal annual rate your lender quotes, the purchase price and your cash deposit. A larger deposit reduces the principal you borrow.
Extra payments reduce interest.
Interest is charged on the opening loan balance each month. The payment first covers that interest; the rest reduces principal. Extra principal payments can therefore shorten the term and reduce future interest. Check your lender’s terms for access and settlement charges.
Budget beyond the bond.
Transfer duty, conveyancing, bond registration, initiation fees, rates, levies, utilities, repairs and property insurance are excluded. The optional monthly service fee is included separately and does not reduce principal.
P is purchase price minus deposit, r is nominal annual rate divided by 1,200, and n is the number of monthly payments. At 0% interest the payment is P ÷ n. A R120,000 loan at 0% for 10 years requires R1,000 per month; an extra R1,000 pays it off in 60 months.
What this estimate assumes
Payments happen at month-end, the interest rate stays constant and every extra payment reduces principal immediately. Interest is calculated monthly, so actual daily-accrual lender balances and rounding can differ. No affordability assessment, property valuation or credit recommendation is provided.
Planning estimates, not personal financial advice or a loan quotation. Ask your lender for a full repayment schedule and charges.
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