Press Release from Andre de Villiers - Western Cape Regional Chairman - Chas Everitt International
The direction of the property market is at the start of every new year a favorite topic amongst real estate commentators. After a year that has seen the introduction of the National Credit Act as well as substantial increases in interest rates these two issues seem to dominate current discussions.

Those trying to balance a monthly budget should not find an interest rate increase unexpected, although it is never good news for homeowners.

In the South African context interest rates are sctuslly currently not that high. If one looks at the table for the period since 1986 this is quite dramatically reflected and shows the variation since 1986. From a historic high of 24% in September 1998, the current 14% is only 4.5 basis points higher than the low of 10.5% in April 2005.

The most fundamental difference that home owners should be aware of is that interest rates have become far more negotiable over the years. Banks are very much more competitive than they used to be only a few years ago. By using the services of a powerful and skilled bond broker, like Betterbond, you can actually secure a rate today that is far closer to what was being offered a year ago!

If you are buying a property remember that there are three important considerations to take into account;

Bigger bonds usually attract a better rate, but the lower the % of the bond to the purchase price the stronger your position. In other words the bank likes to see you invest money into the purchase. In addition a strong bond broker (whose services are free to the client as the Broker is paid by the bank for placing the business) is in an excellent position to negotiate between banks to secure you a better deal. The reason the bond brokers have become so successful is their powerful position to negotiate – a far stronger position than most individual could ever enjoy. Bond brokers also know how to favourably present your financial circumstances in the light of the National Credit Act.

Home owners with existing bonds who have received a few letters of late about the increased rates are not powerless either. If you took your bond out about five years ago or more, you may well discover that a well placed phone call to the financial institution holding your current mortgage may result in a lower rate than you are currently paying. You have nothing to lose! The mere suggestion that you are looking to move your mortgage will have the banker reaching for their calculators to offer you a sweeter deal as long as your repayment record is unblemished!

Home Loan Lending Rates History

Interest (% pa)

Effective from

14.00%

2007-10-15

13.50

2007-08-20

13.00%

2007-06-11

12.50%

2006-12-11

12.00%

2006-10-13

11.50%

2006-08-03

11.00%

2006-06-12

10.50%

2005-04-18

11.00%

2004-08-16

11.50%

2003-12-15

12.00%

2003-10-20

13.50%

2003-09-15

14.50%

2003-08-15

15.50%

2003-06-13

17.00%

2002-09-13

16.00%

2002-06-14

15.00%

2002-03-18

14.00%

2002-01-16

13.00%

2001-10-01

13.50%

2001-07-16

13.75%

2001-06-18

14.50% 2000-02-01
15.50% 1999-10-04
16.50% 1999-08-16
17.50% 1999-07-14
18.00% 1999-07-02
Interest (% pa) Effective from

19.00%

1999-05-03

20.00%

1999-04-02

21.00%

1999-03-02

22.00%

1999-02-02

22.75%

1999-01-04

23.25%

1998-11-16

24.00%

1998-09-02

22.00%

1998-08-03

21.50%

1998-07-16

20.00%

1998-07-02

18.00%

1998-03-16

19.00%

1997-11-01

20.00%

1996-11-21

19.00%

1996-10-01

19.25%

1996-07-01

20.25%

1996-05-20

19.25%

1996-05-03

18.25%

1995-07-05

17.25%

1995-03-22

16.25%

1994-11-01

15.25%

1993-12-01

16.00%

1988-09-24

15.00%

1988-05-05

13.50%

1988-03-10

12.50%

1986-12-10

Article by: Andre de Villiers - www.chaseveritt.com