Real tips for paying off your bond earlier than expected

When your home loan is approved, you will usually be expected to pay the bank back over 20 years. While this can be an overwhelming prospect, the good news is that there are some simple and savvy strategies that you can put into place to pay off your home loan far sooner than that. Jawitz Properties provides the lowdown on some of the ways you can make your debt a thing of the past faster - and save yourself a jaw-dropping amount of money by doing so.

Strategy 1: Consolidate your capital

If you have an emergency savings or "rainy day fund", consider putting these funds into your home loan - especially if you have an access bond. Having your capital invested in your loan will reduce the amount of interest that you have to pay and with an access bond, you'll still have easy access to your funds if you need them. You could also speak to a financial adviser about the possibility of consolidating any other debt you have with your home loan. Since your home loan's interest rate is likely to be lower than the rate you are being charged on other debt, this could be another opportunity to save. With an access bond, moving funds in or out of your home loan account is as simple as logging into your online banking profile.

Strategy 2: Find ways to pay extra into your bond every month

Times are tough but it's often easier than you might think to find ways to cut back on your spending habits and put a bit of extra money into your home loan every month. Even if it's just a few hundred Rand, it will make a difference. Ask yourself and your family where you could cut back. For example, you could ask your family whether you need multiple streaming services and whether you could cut down on how often you order takeaways or get coffee on the go. Curbing impulse online shopping is another great way to prioritise your financial goals.

Strategy 3: Put pay raises and annual bonuses into your bond

When you get your annual pay raise or end-of-year bonus, channel these extra funds straight into your home loan if possible. Whether it's a once-off lump sum (like a bonus) or a little bit extra every month (from an increase) it will all help to cut down the duration of your home loan. This strategy will work best in years when you get an increase that's greater than just a cost-of-living adjustment.

If you make a once-off lump sum payment into your home loan, your monthly debit order won't change. It is simply a strategy for paying off your debt faster. The only time your repayment amount will change is when the interest rate fluctuates.

Tip 4: If the interest rate drops, keep your repayment at the same level

It's likely that the prime interest rate will start to drop later in 2024, which will lead to cuts in your monthly bond repayments. If you choose to keep paying the amount that you have become accustomed to paying, you'll cut down the duration of your bond.

Tip 5: Make your property work for you

Do you have a spare bedroom or a granny flat? Renting out extra space on your property can be a great way to cut down the time remaining on your bond, because any rental funds that you earn can be paid into your home loan account. If the idea of being a landlord is unsettling then you can rely on Jawitz Properties' rental services to simplify and manage the process.

From the day you make your application to the bond originator to the wonderful day when you make your final payment, Jawitz Properties is here to help. Contact us with any real questions you have at any point on your road to homeownership.