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How to use the Switch & Save calculator
Switch & Save works out whether moving your bond to a bank offering a lower rate is actually worth it. The lower repayment is the easy half. The penalty interest, the cancellation attorney and the new registration are the half the switch adverts leave out, and they decide whether you come out ahead.
The tool nets the monthly saving from the lower rate against everything the switch costs up front, then shows the month those costs are repaid. After that month the switch is pure saving; before it, you are down on the deal.
A small rate drop rarely justifies a switch on its own. The costs run to tens of thousands, so a 0.25% saving can take a decade to break even. The bigger the rate gap and the balance, the faster it pays, and this puts that break-even in plain months.
What you'll need
- Your current bond: outstanding balance, current rate and remaining term, from your latest statement.
- The new offer: the rate and term.
- The switching costs: the cancellation attorney and the new bond registration, whether you gave 90 days notice (which usually waives the penalty interest), and any cashback the new bank offers.
How to use it
Enter your current bond from your statement, then the new rate and term. Stretching the term lowers the monthly payment but can cost more overall, and the saved-over-the-term figure keeps that honest.
Set the switching costs. Leave bond registration on Auto (SA) for an estimate, or Manual for a quote. The 90-day-notice toggle matters: the NCA lets a bank charge up to three months penalty interest on early settlement, generally waived if you give written notice first. Net off any cashback the new bank contributes.
Reading your result
The monthly saving compares the old and new repayments. The break-even tells you how many months the saving takes to repay the once-off costs, and the saved-over-the-term figure is what you keep after every cost, across the whole loan.
The cumulative-saving chart crosses zero at break-even: below it, the switch has not paid for itself yet. The interest comparison shows the old path against the new over their terms.
A worked example
An R1,500,000 balance with 20 years left at 10.5%, offered 9.9% over a fresh 20 years. Notice given, so no penalty. Costs: about R40,200 to register the new bond and R6,000 for the cancellation attorney.
The lower rate saves R600 a month. The switch costs R46,200, so it breaks even after 78 months, about six and a half years, and saves R97,708 over the full term. Worth it only if you are staying well past that mark. A wider rate gap, say a full point, would pay back in half the time.
What it does not do
It uses guideline costs; your attorney's quote and your bank's penalty treatment will differ, so use real figures once you have them. It does not model a switch done purely to release equity. It is information, not advice to switch any specific bond.
To understand the rate your bond tracks, read what a 1% repo move does to your bond. When you are ready, open Switch & Save.
Money Cat is an information tool, not financial advice. Costs and penalty rules vary by lender; confirm yours before you switch.