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Should You Pay Off Your Home Loan Early?

Statistics South Africa (StatsSA) revealed that the majority of consumers have settled their bonds. Does it mean homeowners will be anticipating the prospects and viability of paying off their home loans early?

Calvin Ndlovu, Head of Operations at FNB Home Loans, says, “It all depends on your individual circumstances and long-term objectives, as well as how you plan to structure your own or family’s finances.” Ndlovu delves deeper into the advantages and disadvantages of settling a home loan early:


  1. Early settlement can help you save on interest, allowing you the freedom to pursue other ventures.

  2. If you’re approaching retirement and planning to settle in that particular home, it is advisable to pay it off.

  3. You eliminate the risk of defaulting if you’re temporarily or self-employed.

  4. Provides a safe haven in tough and uncertain economic conditions.

  5. Having more disposable income can help you put more towards your short-term or retirement savings.


  1. Because a home loan typically offers you the cheapest debt available, you can save a lot of money in interest by paying off other debt first, such as personal loans, credit cards and car finance.

  2. If you are currently renting out the property you can save on tax, as interest paid on your bond is tax deductible.

  3. Depending on your goals, it might be a better option to diversify by saving and investing the money elsewhere.

  4. You will no longer have immediate access to debt at a low interest rate, which could be used for renovating, emergencies or personal cash flow management.

  5. As a property investor you can use the extra cash to put down a deposit on another property and still have access to funds in your bond.

  6. You will be liable for bond cancellation fees and may be charged additional interest if you fail to notify your bank 90 days in advance, that you are planning to close your home loan account.

Before making this important decision, it is always best to seek advice from an expert or financial advisor about your personal financial goals.

Source: FNB. Images: Pixabay

#FNB #debt #moneymatters #homeloan #moneyadvice

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