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How to manage the impact of rising interest rates on your home loan
Senior Member
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In this time of rising interest rates, many consumers are reaching for their calculators to work out just what it might mean for their home loan repayments. If you’re among them and think you might struggle in the near future, you might want to consider some solutions to reduce the impact on your family.


Below, we highlight a handful of ways that can help keep you afloat:


  1. Keep a record of everything that is spent over a month

Examining your expenses critically will reveal where money can be saved. Reducing spending on ‘non-essentials’ and even sacrificing that daily cup of coffee can make a huge difference, especially when you cost these items out over 12 months. For example, you can save about R5 000 a year just by not buying a coffee at work every day.


  1. Seeing if your budget savings enable you to pay more than required into your bond

This will deliver short-term and long-term benefits. In most cases, it will insulate you from further rate increases, because what you manage to pay in could exceed a new rate increase. In the long-term, and depending on the size of the increased contribution, you can shave years off your repayment period and save thousands on interest payments.


  1. Allocating a portion of any extra income or an annual bonus payment to your bond This can shield you from interest rate increases and be a great investment in your future.


Though it is certain that South Africa’s interests rates will eventually decrease, the cycle will continue and they will, of course, also rise again, as in any country. So, it’s smart to live by the above advice, no matter the country you find yourself in - or the state of its economy - to help ensure your financial stability.


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