Forget the January sales, spend money on your bond

With interest rates still on an upward course, homeowners should be taking especial care now to stay on top of their bond repayments. "First-time buyers, in particular, need to budget carefully to ensure that in the excitement of moving to their home, expenses for furnishing, decorating and home improvements don't undermine their ability to pay these most important instalments," says Berry Everitt, MD of the Chas Everitt International property group.

"In fact, it is probably a good plan for most homeowners to forget about buying that new lounge suite or installing a new carport for a while, and make provision instead for increases in other property-related payments such as municipal rates and insurance premiums that he new year is bound to bring."

What is more, Everitt points out, if homeowners can scrape together even a small extra amount every month to pay into their bond, the long-term savings will be substantial. The reason is that any extra money paid into the bond goes towards paying off the borrowed capital, reduces the interest and thus enables the homeowner to pay off the loan well before the end of the bond term.

"On the other hand, skipped or late payments will attract additional interest and, in some cases, penalties - which at the very least will add to the homeowner's debt burden and increase his or her monthly liabilities instead of decreasing them, and could eventually lead to the home being repossessed."

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