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|
|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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