Home Loans Tips:
Your home loan interest rate is one of the most important factors to consider when applying for a mortgage, and in fact it will remain the most important factor for the duration of your bond.
Moneyweb.co.za recently ran a report in which a one of property and home loan experts were asked whether consumers should fix their home loan rates, considering the current market conditions and the types of products being offered currently.
The majority of the professionals interviewed seem to support a Variable Interest Rate.
Grant Bulter, of Bond Choice, says that people should be wary of fixing their bonds. He explains that we have entered into a stable interest rate period and if rates do move it may only be by 0.5%.
Susan van Aswegen added that banks cover themselves with the fixed rate by charging a premium above the current prime rate, usually about 2% higher.
â€œThe property owner shouldnâ€™t think they are in a win-win situation. If the interest rate is low, as it is now, I feel it is better to reap the benefits of paying less,â€ van Aswegen told Moneyweb reporter Chris Nthite.
But, while most property and bond experts are still promoting variable home loan rates SA HOME LOANSâ€™ Kevin Penwarden is objecting. Penwarden believes that home owners should use this opportunity to fix their rates at a â€˜low, low interest rateâ€™.
â€œIn the last 20 years, we have seen volatility in interest rates, with prime rates having been below 12% for only 18 months during that timeâ€, said Kevin Penwarden. â€œWe now have interest rates at their lowest in 20 years, which SAHL believes is exactly the right time to offer South Africans fixed home loans.â€
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