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A Fin24 user wants to know the difference between a bond loan period and a bond repayment period. He writes:
I want to know what the difference is between a bond loan period and a bond repayment period.
And on what amount is the interest calculated against daily?
JP Farinha, CEO of Property24, responds:
The bond period and repayment period you mentioned refer to the same thing.
The monthly repayments that you are required to make will continue as long as there is a balance outstanding on your bond, therefore the repayment period will be the same as the loan period.
When it comes to the amount that is owed each month, this is dependent upon the interest rate you are granted and the size of the loan when you sign your home loan agreement.
However, fluctuations in the interest rate can affect your monthly instalments.
Another point worth noting is that initially almost all of the repayments cover the interest portion of the loan. As this becomes smaller, the amount left on the capital portion will begin reducing more quickly.
If you would like to get an idea of what your monthly repayments will be based on the amount you want to borrow and the interest rate, you can use Property24’s bond calculator.
For more information about applying for a bond and the property registration process, visit Property24’s Property101 Guides or view the easy-to-read infographic.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
I want to know what the difference is between a bond loan period and a bond repayment period.
And on what amount is the interest calculated against daily?
JP Farinha, CEO of Property24, responds:
The bond period and repayment period you mentioned refer to the same thing.
The monthly repayments that you are required to make will continue as long as there is a balance outstanding on your bond, therefore the repayment period will be the same as the loan period.
When it comes to the amount that is owed each month, this is dependent upon the interest rate you are granted and the size of the loan when you sign your home loan agreement.
However, fluctuations in the interest rate can affect your monthly instalments.
Another point worth noting is that initially almost all of the repayments cover the interest portion of the loan. As this becomes smaller, the amount left on the capital portion will begin reducing more quickly.
If you would like to get an idea of what your monthly repayments will be based on the amount you want to borrow and the interest rate, you can use Property24’s bond calculator.
For more information about applying for a bond and the property registration process, visit Property24’s Property101 Guides or view the easy-to-read infographic.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
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