Ask Maya – The best way to reduce your mortgage payments

2013-07-29 10:00

The questions we received from readers this month highlight how valuable your credit record can be. Whenever you take on debt, beware of the real cost

of missing payments or not being able to repay them. Make sure you get your free annual credit check from credit bureaus. Some websites also offer consolidated reports

Wildred writes:

I would like to buy an R80?000 house and want to know the likely monthly repayment per month.

Maya replies:

How much you will pay each month depends on your initial deposit and the interest rate. By having a good credit record and putting down a deposit, you can make your home purchase even more affordable each month.

Good credit record with a 10% deposit:

»?With a good credit record and a deposit of R8?000, you should qualify for an interest rate of 9%;

»?You would pay R648 per month; and

»?Over the 20 years, you would pay R155?427.

Weak credit record with no deposit:

»?If you did not put down a deposit and did not have a good credit record, you may be charged an interest rate of at least 10%;

»?Your monthly repayment would jump to R722 per month; and

»?Over 20 years, you would pay R185?284 in total.

By putting down a deposit and having a good credit record, you could save nearly R30?000.

You could save up the R8?000 needed for a deposit within a year if you just saved your future mortgage payments.

Save by paying in more. If, instead of paying R648 a month you increased your payments by just R74 a month to R722, over the repayment period you would save a massive R62?000 and your house would be paid off in 15 years.

»?Mortgage calculations have been worked out on

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