Buying a home is a long-term financial commitment - but there are ways to make your home more affordable, a deposit is one way.
When you pay a deposit towards the purchase of a property, your loan amount and your monthly repayments will be less. And, a deposit may even get you a better interest rate on your home loan.
How can a deposit save me money?
Take a look at the example below:
(please note: the amounts shown below are simply examples of a potential scenario):
| With a deposit | Without a deposit | |
| Purchase price of property | R 550 000.00 | R 550 000.00 |
| Deposit | R 55 000.00 | R 0.00 |
| Deposit percentage (of home cost) | 10% | 0% |
| Home Loan amount | R 495 000.00 | R550 000.00 |
| Term (in months) | 240 | 240 |
| Interest rate | 9,65% | 9,95% |
| Monthly repayment | R 4 760.47 | R 5 289.41 |
| Savings (per month) | R 528.94 | |
| Savings (over 240 months) | R 150 424.44 |
- In the above example, with a deposit of R55 000.00 you could potentially save R150 424.44 on your loan repayments over 240 months due to a lower interest rate and a lower loan amount.
- In the above example, with a deposit of R55 000.00 you could potentially pay R528.94 less per month due to a lower interest rate and a lower loan amount.
Why you should consider a deposit
Paying a deposit could make your repayments more affordable and could get you a lower interest rate, compared to not paying a deposit. Smart financial planning is the best way to buy yourself a home and paying a deposit is almost always the smart thing to do!
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