You save on interest. In the long term, the biggest cost in bond repayments is interest. For example, a bond of R800 000, with a monthly repayment of R7 327 over 20 years, will give you atotal repayment of R1 758 464, with R958 464 of it being interest. If you took double the monthly instalment, you would have reduced the bond to six years, saving R716 221 in interest. Even if you can’t pay double, any extra amount will significantly lower interest.
Tax benefits. Normally, if you make aprofit on property, you have to pay capital gains tax (CGT). But, SARS considers the first R2 million gain on the sale as CGT-exempt. If you’re not selling the house, but merely paying more into the bond, then there are no…