LOWEST INTEREST RATES IN OVER 30 YEARS.

Fri 20, 07, 2012

The interest rates have remained at a 30-year low since November 2010 and are likely to stay there a while longer.

Why is this important for the South African property market and homeowners?

The majority of South African homeowners and buyers are loan dependent and require financial assistance to purchase property.

Homeowners who haven?t fixed their rate will have reduced monthly repayments the lower the interest rate and increased repayments if it goes up.

A low interest rate could give a homeowner the ability to pay extra money into their bond, reduce the term of the loan and pay it off faster, without affecting their monthly budget too severely.

In today?s property market the overall monthly bond repayments are a great deal cheaper.

This, coupled with where property pricing is at the moment, makes it an ideal time to buy property.

Aside from the possible fluctuations on repayments for homeowners, the interest rate directly affects buyers wanting to purchase property and how much they can afford. Since the introduction of the National Credit Act, banks have put a lot of emphasis on affordability levels and a low rate assists buyers in showing higher affordability levels.

Paying interest at a lower rate will indirectly put more disposable money in the buyer?s pocket and drive demand in the property market, while more buyers with a clean credit record are finding it easier to raise finance and purchase property.

The increased demand will push property pricing up at some stage and increase the home?s value over time.

From an investment perspective the increased demand in property as well as the reduced monthly repayment will result in investors gaining more from their property portfolios.

Consumers who are interested in making the most of the current interest rates and want to invest in the property market should contact Legacy Estates immediately so we can arrange to show you our latest stock and while you at it we can arrange a pre-approval with one of our reputable mortgage originators.
Some may be surprised at the opportunity the interest rate has created in the market.