Does switching your bond actually pay?

Banks advertise the lower repayment. They are quieter about the cancellation attorney, the cost of registering a fresh bond, and the penalty interest that lands if you skip the notice period. Those costs run into tens of thousands of rand, and they decide the whole question.

This calculator nets the monthly saving from the new rate against every once-off cost of moving, then reports the month those costs are repaid. Before that month you are down on the deal. After it, the saving is yours. It also totals what the switch leaves you across the full remaining term, which keeps a stretched term honest: taking a fresh 20 years lowers the payment and can cost more overall.

Two SA-specific mechanics sit inside it. The National Credit Act allows a lender to charge up to three months of penalty interest on early settlement, generally waived if you give written notice first, so there is a 90-day notice toggle. And bond registration follows a guideline scale that rises with the amount, which the tool can estimate or you can override with a quote.

You'll want your latest statement, because the inputs are:

• outstanding balance, current rate, remaining term
• the new rate and the new term offered
• the cancellation attorney fee and the new registration cost, estimated or quoted
• whether notice was given, and any cashback the new bank is putting in

The charts are the useful part. Cumulative saving crosses zero at break-even, so you can see how long you are underwater. The interest comparison runs the old path against the new one across their terms.

A small rate gap rarely repays the costs quickly. A quarter point can take the better part of a decade. Whether that matters depends on how long you plan to keep the place, which is the one input the calculator cannot supply.

Money Cat is an information tool, not financial advice. Confirm any figure that matters with your bank, lender or a registered professional.