Essential Mortgage Tips:
Variable Bond Rates are still the cheaper option – Dont fix your home loan rate yet!
A fix rate offers you peace of mind, but you’ll end up paying more every month for that assurance.
Your current variable mortgage rate is probably a percentage or two below prime, and if you decide to fix your rate now the bank is going to offer you a rate that is one or two percent above prime.
This means that you’ll be charged extra on your bond every month while you wait to see if interest rates are raised higher than the fixed rate you’ve been offered by the bank.
The decision of whether to fix your rate or not can become very technical and in this report, Fin24.co.za economist, Vic de Klerk explains in detail the benefits of keeping your variable bond rate.
But simple put, variable bond rates are cheaper than a fixed rate and most property expects are only predicting another 1% or 2% increase later this year. If rates are raised to that level they will only match the fixed rate you would’ve already been paying up to that time.
Your Home Loan is one of your biggest financial responsibilities and it is also you biggest financial tool and therefore it requires a lot of attention. Before you deciding whether to fix your bond rate or not speak to an independent home loan consultant who will be able to discuss the further benefits or suggest alternative solutions to cutting your mortgage repayments.
Get Free Independent Home Loan Advice – speak to a Mortgage Consultant.