This may not come about, but it would be unwise not to allow for such an increase, he says.
“If the borrower’s resources are likely to be stretched uncomfortably by the higher rate, my advice would be for them to lower their purchase ambitions.
Bearing in mind that homes usually take 10 to 20 years to be paid, it is wise to allow for fairly significant interest rate increases in the future, and to pay one or two percent above the going rate.” At the same time, Rawson says this is not the right time to be ultra-cautious.
for home improvements, they put all their debt into a single bond, paying it off in most cases by means of monthly debit orders.
He says this means that their interest rates are limited to around nine or 10 percent.
With the news media increasingly publishing advice on how to survive lean economic times and with the average South African’s disposable income now 16 percent lower (in real terms) than it was in 2007, those struggling to balance their finances are advised to consolidate their debt into one single mortgage account.
Instead of paying huge interest rates on hire purchase items such as cars, the younger management sect put all their debt into a single bond, paying it off in most cases by means of monthly debit orders.
If they do refuse to consolidate loans into the bond account, it is always possible to change banks.Rawson says like most other property investors, he foresees interest rates rising but relatively slowly as the global economy enters its recovery phase.