Not even a big slash will save the majority
While you may be worrying about meeting your home loan commitments, it is your short term debt that should have you more concerned. Ian Wason suggests a way to combine the two to take advantage of a lower monthly debt commitment
South Africans who are struggling to keep up with their mortgage repayments will certainly be in for some relief when the monetary policy committee announces the next drop in interest rates, but local experts believe that this won't be enough to help most of South Africa's ailing consumers.
Ian Wason, MD of South African bond experts Bondbusters says that while the rate cuts expected over the next year are going to help many people, these individuals could ease monthly pressure even further if they think more about their short term commitments and consolidate their debt into their home loans.
While an expected rate cut of 200 basis points (effectively taking 2% off the interest on your home loan) is going to make mortgage payments easier, local experts believe it is other forms of debt that could be the crucial factors in crippling the economy.
"It is often short term debt that keeps a hold on consumers and while many South Africans are correctly wary of moving their short term debt into the long term, during times like these debt consolidation can be a welcome relief.
By consolidating all your short term debt into your home loan you will benefit from the decrease in interest meaning that your monthly repayments are going to be reduced.
Yes, you will be paying more over the course of the loan, but when the alternative is losing your family home you will be prepared to pay more for the peace of mind of knowing that you can keep up to date with your debt commitments."
By moving short term debts like credit cards, store cards and vehicle repayments into your home loan you can take advantage of the lower interest rates meaning a monthly debt commitment that is lower than when is debt is paid off individually.
Contact a qualified Bondbusters consultant today to ensure that your monthly commitments are more easily met.