There are substantial savings in negotiating a better interest rate deal on your home loan.
If you are paying 20 percent on your bond of R100 000 over 20 years it means you will fork out R307 717 in interest alone to pay off your bond.
Should you be able to negotiate a better rate at say, 19 percent, you will be paying R288 963 in interest over the life of the bond.
Subtracting the amount of interest at the old interest rate from the amount of interest at the new rate, you can see that you will be saving R18 754 in nominal terms.
Effectively you will be saving a lot more because the amount you save every month is compounded over the remaining term of the bond.
Should you decide to move your loan:
* Don't spread the outstanding debt over the full 20-year term, when you have already been paying it off for, say five years. Tell the new bank that you want to repay the loan over 15 years.
* You should pay the costs of moving your bond in cash.
A spokesman for First National Bank Properties says it will cost you about R2 940 to move a R100 000 bond and about R3 610 to move a R200 000 bond.
If you add the R2 940 bond moving costs to the capital of R100 000, at an interest rate of 20 percent, it will take you four years and five months to pay off the R2 490.
If you move your R200 000 bond, and add the R3 610 it will cost to move it, at an interest rate of 20 percent, it will take you three years and nine months to pay off the moving costs alone.