Owning a home is a dream come true for many South Africans, but paying off that bond can sometimes feel like a never-ending marathon. Fear not, because with a few clever strategies, you can speed up the process and save a bundle in interest. Let’s dive into some practical tips to help you pay off your bond faster than a cheetah!
Make extra payments
1 of the simplest ways to pay off your bond early is to make extra payments whenever possible. Even small additional amounts can significantly reduce the total interest you’ll pay over the life of the loan. Consider using bonuses, tax refunds, or any unexpected amounts of money to make extra payments. Every little bit helps!
Switch to bi-weekly payments
Instead of making monthly payments, switch to bi-weekly payments. This means you’ll make 26 half-payments a year, which adds up to 13 full payments instead of 12. This extra payment can shave years off your bond term and save you a substantial amount in interest.
Refinance your bond
Refinancing your bond to a lower interest rate can reduce your monthly payments and the total interest you’ll pay over the life of the loan. Shop around for the best rates and consider refinancing if it makes financial sense. Just be sure to factor in any refinancing costs to ensure it’s worth it.
Round up your payments
Rounding up your monthly payments to the nearest hundred Rand can make a big difference over time. For example, if your monthly payment is R4,850, round it up to R5,000. This small increase can help you pay off your bond faster without feeling a significant impact on your budget.
Use a bond calculator
A bond calculator can help you see how different payment strategies affect your loan term and interest payments. Experiment with different scenarios to find the best approach for your financial situation. Many online calculators are free and easy to use.
Prioritise your bond over other debts
If you have multiple debts, prioritise paying off your bond first. The interest rates on home loans are typically lower than those on credit cards or personal loans, so focusing on your bond can save you more money in the long run.
Cut unnecessary expenses
Take a close look at your budget and identify areas where you can cut back. Redirect the money you save towards your bond payments. Whether it’s eating out less (sorry, old McDonalds), cancelling unused subscriptions, or finding cheaper alternatives for everyday expenses, every bit you save can help you pay off your bond faster.
The importance of buildings insurance
Now, let’s talk about something equally important: Buildings insurance. If you’ve got a bond, you need buildings insurance. It’s not just a requirement from your lender; it’s a smart way to protect your investment. Buildings insurance covers the structure of your home against risks like fire, theft, and natural disasters. Without it, you could be left with a hefty repair bill that could derail your financial plans. So, make sure you have adequate buildings insurance to safeguard your home and your financial future.
Paying off your bond early is a smart financial move that can save you thousands in interest and give you peace of mind. And don’t forget to protect your investment with buildings insurance. Get a commitment-free quote today from the king of insurance by simply clicking here or chatting to us on WhatsApp 0860 50 50 50. Happy home-owning!
Psst… This blog provides general info only, and doesn’t count as financial or product advice from King Price or our legal and compliance experts. Remember, all our premiums are risk-profile-dependent, and T’s and C’s apply. Our most up-to-date KPPD (policy wording) can always be found here.
Our website T’s and C’s can be found here.
