The long weekend got off to a good start for home owners with news of
another cut in home loan rates.
The banks put an end to days of speculation with a cut in both home loan
rates and prime overdraft rates to 15,5 percent from 16,5 percent.
This is the eighth cut this year and brings home loan rates to their lowest
levels since late 1993. It was prompted by fresh cuts in the repo rate.
Markets, keyed up by good consumer and producer price inflation figures and
a stable rand, had been expecting the rate reduction.
But it may well be the last cut this year, economists say. So home owners
would do well to get ahead by cutting debt. Remember, every rand extra you
pay into your home loan will save you thousands in interest over the life
of your bond. And you`ll pay your loan off faster.
Try not to reduce your home loan instalment when the new rate kicks in. At
the old rate, on a R150 000 loan over 20 years, you will save about R96 100
and shave almost five years off your bond.
On existing loans, the reduced home loan rate is available from October 4
at Standard Bank, FNB, Nedbank, Permanent Bank and Peoples Bank; from
October 11 at NBS; and from October 18 at Absa.
On new loans, the new rate kicks in immediately at Nedcor, Permanent Bank
and Peoples Bank; on Monday at NBS; and on October 4 at Absa, FNB and
Standard.