The benefits of an access bond has become so clear that most new home loan accounts are now access bonds too. The range of types of home loans available these days has grown tremendously, and all the major banks now offer Access Bonds.
Basically, an access bond is a home loan that allows you to save extra monies into your home loan account, to help reduce the outstanding loan amount and the interest charged. The brilliance is that you still have access to all those extra funds.
That means, if you paid an extra R200 into your bond every month, you would not only be charged less interest but all those funds would still be available to you.
Unlike car repayments, the interest charged on your home loan account is calculated on the current full outstanding loan amount. If you reduce the outstanding amount on your mortgage, you’ll end up saving thousands in interest payments.
The extra funds are not locked into your bond though, you’ll be able to withdraw those savings, whenever you need it.
There is no restriction to the amount you can pay into your home loan account , but you are limited to withdrawing a minimum of R1000 from your access bond.
Also you cannot make direct payments from your access bond account. You will need to transfer the funds to a different savings or cheque account first.
Many people have diligently saved extra monies into your bond account, and have used those funds to purchase cars, pay education fees and take a long holiday.
The extra funds you save, belongs to you and there is no restriction on what you use your money for.
Speak to a Home Loan Consultant about the extra benefits of an access bond and how to best use this type of home loan.