Bond Repayment Calculator

This calculator uses a default prime lending rate of 10.25%. Most home loans (bonds) are priced at prime or prime plus a margin (for example, prime + 1%). The prime rate generally moves in line with SARB repo-rate changes, so always confirm the current rate and your quoted margin with your bank before making decisions.

South African banks apply a general rule that your total monthly bond repayment should not exceed 30% of your gross monthly income. This is sometimes called the "debt-to-income ratio" guideline. Banks also consider your total monthly debt obligations (car finance, credit cards, personal loans) — the total should ideally be under 40% of gross income. For example, if you earn R50,000 per month, a repayment budget of about R15,000 per month is a common starting point, but the exact bond amount depends on your interest rate, term, deposit, and credit profile.

Bond interest is calculated daily on the outstanding balance. Every extra rand you pay goes directly toward reducing your principal (the outstanding capital). A lower principal means less interest accrues each month, which means more of each future payment reduces the principal — creating a compounding benefit. On a R1,000,000 bond at 10.25% over 20 years, paying an extra R500 per month saves about R221 103,73 in interest and shortens the term by about 2 yrs 9 mo.

Beyond the purchase price and deposit, South African home buyers face several additional costs: (1) Transfer duty — paid to SARS on properties above R1,210,000, ranging from 3% to 13%. (2) Transfer attorney fees — typically R20,000–R50,000 depending on the purchase price. (3) Bond registration costs — the bank's attorney charges to register the bond, typically R15,000–R40,000. (4) Bond initiation fee — usually around R6,000. (5) Property valuation — approximately R1,500–R3,000. Budget for roughly 8–10% of the purchase price in additional costs.

In South Africa, "bond" is the everyday term for what is legally called a mortgage bond — the legal agreement that gives the bank a security interest over your property in exchange for lending you money to buy it. The words are used interchangeably in South Africa. "Mortgage" is the internationally recognised term used in most other countries. When South Africans say they are "paying off their bond", they mean they are making monthly home loan repayments. The legal mechanism is identical — a mortgage over the title deed registered at the Deeds Office.

Extra payments can significantly shorten your bond term. For example, on a R1,000,000 bond at 10.25% over 20 years, the standard monthly repayment is about R9 816,43. Paying an extra R500 per month reduces the term to about 17 yrs 3 mo and saves roughly R221 103,73 in interest. Paying an extra R1,500 per month reduces the term to about 13 yrs 10 mo and saves roughly R485 663,84. The earlier in the bond term you make extra payments, the greater the saving, since interest is higher when the balance is large.