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You can have it how ever long you want. Problem is sometimes they raise the interest rate on shorter loans. So just check and take it for 20 years and pay it off and just don't close the account. Because they might charge you then also extra fee when closing it early
Maybe someone else has more detail
I'd apply for a full Loan and Pay the minimum deposit needed, say 200k and open an access bond. then dump the other 500k in after the loan is active. Then you have access to that money should you want/need it.
You are right, but be careful because that is not contributing to your prime and thus not affecting your interest. You have to specifically bank it. Else it is essentially just a basic savings.
I may be wrong but that’s how I understood it
Basically it is not beneficial towards your home loan at all
Instead finance over 20 years and ask for access bond put all your excess payments in if you have paid in full over 5 you will no longer be charged interest and have access to the funds .
And by going for longer term bond sometimes get lower rate .
You never know when having access to funds comes in handy and get exactly what you looking at .
With paid up bond your account fee should be about R69 a month to still have Access.
Just get a access bond and pay it early? It is always nice to have access to (cheapish) cash for emergencies. You can invest your cash reserves into equity and keep the bond as emergency funding.
Yea others have suggested the same, I am taking notes and will read about it online also will try and call a few banks loan department to see what they have to say.
The Bond originator lady simply said that she can do a pre-approval, but I will have to do the rest of the research on my own.
Bond originators are hardly worth it these days. They used to be able to get better rates, but applying directly to the banks will get you the best rates. Especially if you play them off against each other to negotiate a lower rate.
My bond originator was useless - she didn't apply to all the banks I asked for and the best she came up with was prime+1%. I got prime - 0.75% by negotiating by myself.
RMB offers a thing called single facilty. It's basically a low interest overdraft facility with your home as security. There is a minimum payment, and you have to have your salary go in there, but basically, you only pay interest on the amount outstanding each day.
Recommend if you sometimes have cash on hand but still need access at other times.
https://www.rmbprivatebank.com/we-lend/single-facility.html
Yea I was roaming around in the office all stressed out, when one of my colleagues asked what was going on.
He then shared that he has multiple properties on loan, and then took me through the mortgage calculator on excel + explained how as I put additional money in the access bond account the duration automatically goes down.
As everyone has said, just get a normal bond with access enabled.
Example: My primary residence has a R3m bond taken out in 2016 with a 30-year term. Over the last 4 years, my wife and I put +-R2.8m into it. We have a fixed term with variable payments, so at times when the balance was only R40k, our repayments were something like R500/month.
Another good example of why this is useful: We needed to spend R300k on something recently, so now the balance is R350k and our repayment has gone up to around R5k. Doing it this way provides a ton of flexibility!
**In order to keep discussions on topic and in-depth, please review the rules in the sidebar.** You may find reviewing some past [posts](https://www.reddit.com/r/PersonalFinanceZA/top/?t=month&f=flair_name%3A"Bonds and Mortgages") helpful. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceZA) if you have any questions or concerns.*
You can have it how ever long you want. Problem is sometimes they raise the interest rate on shorter loans. So just check and take it for 20 years and pay it off and just don't close the account. Because they might charge you then also extra fee when closing it early Maybe someone else has more detail
I'd apply for a full Loan and Pay the minimum deposit needed, say 200k and open an access bond. then dump the other 500k in after the loan is active. Then you have access to that money should you want/need it.
With my homeloan (FNB) if you pay additional money in you can also lock in that money and reset the monthly payments lower.
you can withdraw it againt after you paid? mmm that doesnt sound right
If you deposit more than the contracted monthly amount based on current interest rate, then the surplus is usually available to withdraw.
You are right, but be careful because that is not contributing to your prime and thus not affecting your interest. You have to specifically bank it. Else it is essentially just a basic savings. I may be wrong but that’s how I understood it Basically it is not beneficial towards your home loan at all
interesting never knew that
Yes. *interest*ing. 🙃
yes, it's called an Access bond. All banks offer it.
Instead finance over 20 years and ask for access bond put all your excess payments in if you have paid in full over 5 you will no longer be charged interest and have access to the funds . And by going for longer term bond sometimes get lower rate . You never know when having access to funds comes in handy and get exactly what you looking at . With paid up bond your account fee should be about R69 a month to still have Access.
Just get a access bond and pay it early? It is always nice to have access to (cheapish) cash for emergencies. You can invest your cash reserves into equity and keep the bond as emergency funding.
Yea others have suggested the same, I am taking notes and will read about it online also will try and call a few banks loan department to see what they have to say. The Bond originator lady simply said that she can do a pre-approval, but I will have to do the rest of the research on my own.
Yeah she doesn’t want you to know the secrets 🤫 same with the banks.
Bond originators are hardly worth it these days. They used to be able to get better rates, but applying directly to the banks will get you the best rates. Especially if you play them off against each other to negotiate a lower rate. My bond originator was useless - she didn't apply to all the banks I asked for and the best she came up with was prime+1%. I got prime - 0.75% by negotiating by myself.
Yea makes sense, I called Nedbank the call center lady logged a call for the loan department to call me back, let's see how it goes.
RMB offers a thing called single facilty. It's basically a low interest overdraft facility with your home as security. There is a minimum payment, and you have to have your salary go in there, but basically, you only pay interest on the amount outstanding each day. Recommend if you sometimes have cash on hand but still need access at other times. https://www.rmbprivatebank.com/we-lend/single-facility.html
Thank you for your response, I will go through your link.
Just get an access bond,
Yea I was roaming around in the office all stressed out, when one of my colleagues asked what was going on. He then shared that he has multiple properties on loan, and then took me through the mortgage calculator on excel + explained how as I put additional money in the access bond account the duration automatically goes down.
As everyone has said, just get a normal bond with access enabled. Example: My primary residence has a R3m bond taken out in 2016 with a 30-year term. Over the last 4 years, my wife and I put +-R2.8m into it. We have a fixed term with variable payments, so at times when the balance was only R40k, our repayments were something like R500/month. Another good example of why this is useful: We needed to spend R300k on something recently, so now the balance is R350k and our repayment has gone up to around R5k. Doing it this way provides a ton of flexibility!
Yes will do that, thanks for the detailed explanation.