Does extra payments on your bond help

Author
MyProperty
South Africa's #1 independent property portal

The benefit of paying extra on a mortgage isn’t just in reducing the monthly interest expense a tiny bit at a time. It comes from paying down your outstanding loan balance with additional mortgage payments, which slashes the total interest you’ll owe over the life of the loan.

Even paying as little as R50 extra on your bond, you can immediately start saving on interest.

By paying R50 extra on a R500 000 Home Loan on a 10% interest rate for 20 years, you will be able to pay off your home loan in 19 years and three months, while saving over R24,941 in interest that you would have paid to the bank.

You should also consider paying a lump sum if you get a bonus at work for example.