PP Smit Attorneys

Menu
Langebaan: 022 772 2072 | Email: [email protected]

Is Bond Switching the Key to Lower Mortgage Payments?

In recent years, bond switching has become an increasingly popular choice among homeowners looking to reduce their monthly payments, access better loan terms, or take advantage of improved interest rates. But is switching your home loan the right move for you? Before making any decisions, it’s important to understand what bond switching entails, the potential benefits and risks, and the process involved.

What is Bond Switching?

Bond switching refers to transferring your existing home loan from one lender to another to take advantage of better terms, such as lower interest rates or more flexible repayment conditions. Unlike applying for a new bond to buy a home, bond switching is purely about refinancing your current loan. This process can help you secure a better deal without the need to sell your property.

Why Would You Consider Switching Your Bond?

There are several reasons why homeowners in South Africa may consider switching their bond:

  1. Lower Interest Rates: If interest rates have dropped since you took out your bond, switching to a new lender with more competitive rates can help you save a significant amount of money over the life of the loan.
  2. Better Loan Terms: You may find a lender offering better repayment terms that suit your current financial situation. This could include flexible payment options, the ability to adjust your payment period, or lower monthly instalments.
  3. Improved Credit Profile: If your credit score has improved since you first took out your bond, you might qualify for better terms with a new bank, helping you lower your interest rate or shorten your repayment period.
  4. Consolidate Debt: For homeowners with multiple debts, switching your bond can provide the opportunity to consolidate your debt, simplifying your finances and potentially reducing your monthly payments.
  5. Access to Equity: If you’ve built up equity in your home over time, you may be able to access this money when refinancing your bond, which could be used for renovations, investments, or other financial goals.

The Process of Bond Switching

The bond switching process typically involves two key stages: bond cancellation and new bond registration.

  1. Bond Cancellation: Your current home loan must be settled with your existing lender. This involves cancelling the bond with the deeds office, which requires the assistance of a conveyancer or property attorney.
  2. New Bond Registration: Once the original bond is cancelled, a new mortgage is registered in favour of the new lender. This is also done at the deeds office, and legal fees will apply for this process.

Both of these steps require a conveyancer to manage the legal aspects, ensuring that everything is processed smoothly and in compliance with the law.

Costs Involved in Bond Switching

While bond switching can be financially beneficial in the long run, it’s important to be aware of the costs involved in the process.

These may include:

  1. Bond Cancellation Fees: Your current bank may charge a fee to cancel the bond.
  2. New Bond Registration Fees: The new lender will require a bond to be registered in their name, which incurs fees.
  3. Conveyancing Fees: A property attorney will need to handle the legal aspects of both the bond cancellation and the new bond registration.
  4. Early Termination Penalties: If you switch before your initial bond term ends, you may face penalties for early termination, depending on the terms of your original agreement.

Is Bond Switching Right for You?

Bond switching can be a great way to save money and improve your financial position, but assessing your personal situation is essential before making any decisions. Consider your long-term financial goals, the costs involved, and whether the benefits outweigh the risks.

If you’re considering switching your bond, be sure to speak with a financial advisor or property law expert who can help you navigate the process and ensure you make the best decision for your circumstances.

 

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes.

Tagged ,
We use cookies to improve your experience on our website. By continuing to browse, you agree to our use of cookies | POPIA Notice | PAIA
X

Carla Cloete

Director | Attorney, Conveyancer & Notary | LLB

Carla obtained her LLB at the North West University, Potchefstroom Campus in 2015. She completed her articles in 2017 with Brits Dreyer Inc in Bellville. She is an admitted Attorney, Notary and Conveyancer. After her articles she relocated to Kimberley where she worked as a professional assistant in the Conveyancing department of Van de Wall Inc. Coming back to her Western Cape roots, she now joins the PP Smit team as a professional assistant.

Carien Hamman

Attorney & Notary | LLB

Carien grew up and matriculated in the picturesque town of Ceres, whereafter she furthered her studies at the University of Stellenbosch and obtained her LLB degree in 2015. She completed her articles at VanderSpuy Cape Town in 2017 and stayed on as an associate litigant after being admitted as an attorney during early 2018. Carien loves the countryside and thus ventured back to Ceres where she joined Joubert Van Vuuren Inc. for a year. However, when she was presented with the opportunity to enjoy both the country- and the seaside, she couldn’t resist and joined PP Smit Attorneys at the beginning of 2022 as an avid litigator. When she is not at the office, Carien enjoys long walks, wine tasting, and exploring the area with her family and friends.

Harmann Potgieter

Attorney | LLB | NQF 7

Harmann graduated in 2018 with an LLB degree from the North-West University’s Potchefstroom Campus. He went on to study and grow in various fields, including doing a course on the Consumer Protection Act and a course at the University of South Africa where he obtained his NQF 7 Certificate in the Administration of Deceased Estates.

Harmann completed his articles of clerkship at Swemmer & Levin under the supervision of Mr Richard Phillips. After being admitted as an attorney in 2020, Harmann continued with PP Smit Attorneys as a professional assistant in the deceased estates department as well as the litigation department. He loves to study, possesses a deep curiosity about the world, and is dedicated to giving back to the community.

Andre van der Walt

Director | Attorney | LLB

Andre graduated in 2015 with an LLB degree from the University of Pretoria. He later went on to obtain his NQF 7 Certificate in the Administration of Deceased Estates from the University of South Africa, which allowed him to further his career in deceased estates and the drafting of wills and trusts. Andre served his articles at Barnard & Patel Attorneys under the supervision of Mr YAS Patel. After being admitted as an attorney in 2016, he continued working at Barnard & Patel Attorneys as a professional assistant in the deceased estates department.

Andre joined Van Rensburg Attorneys in 2019 and was head of the deceased estates department until 2021. He then received the opportunity to move to the West Coast, where he joined Swemmer & Levin Attorneys, and not too long after that, he grabbed the opportunity to work at PP Smit Attorneys. Andre loves travelling and enjoys the beauty that our country has to offer with his friends, family, and loved ones.

Jandré Smith

Director | Attorney | LLB

Jandré grew up and matriculated in the small Klein Karoo town of Oudtshoorn. He furthered his studies at the North-West University in Potchefstroom, obtaining his LLB degree during 2015. He completed his articles at Swemmer & Levin in 2017 and was subsequently appointed as a professional assistant. In 2020, Jandré was promoted to the position of director of the firm, where he practices in the Litigation department. Jandré additionally joined the company of PP Smit Attorneys during the same year. When not practising law, Jandré is an avid sports fan. He has a passion for nature and enjoys camping, trail running, and mountain biking with his family.

Richard Phillips

Director | Attorney | Bcom & BProc

After matriculating at Paarl Boys’ High School, Richard completed his BCom and BProc degrees at the University of Port Elizabeth. He served his articles with Van Wyk Fouchee in Paarl and quickly developed an affinity for litigation. Richard has always had a deep love for the ocean and when he was presented with an opportunity he joined the company of PP Smit Attorneys during 2006. Richard specialises in general litigation and divorces. When he is not in the office or with his family, he tries to spend as much time as possible in or on the water.

Johann Maree

Director | Attorney | BA. LLB

Johann matriculated at Oudtshoorn High School and attended Stellenbosch University, where he obtained his BA Law and LLB degrees. Following his studies, he worked for three years as State Prosecutor at the Magistrate’s Court in Cape Town. Johann completed his legal training with the State Attorney in Pretoria and then moved to his hometown, Oudtshoorn, where he worked as a lawyer for a year. In 1983, he moved to Vredenburg and joined Swemmer & Levin, where after he joined the company of PP Smit Attorneys during 2006.. When he is not in the office, Johann enjoys cycling and in his earlier days, he used to be a long-distance junkie.

Pieter Smit

Director | Attorney & Conveyancer | BA. LLB

Pieter obtained his BA Law degree from Stellenbosch University in 1995 and his LLB degree from the North-West University in Potchefstroom in 1998. He served his articles at Marais Muller Attorneys from 1998 to 1999 and was admitted as an attorney in 2000 and as a conveyancer in 2002. Pieter is the founder of PP Smit Attorneys, which opened its doors in 2004. He also became a director of Swemmer & Levin in 2006. Pieter loves the outdoors and participating in all forms of sport, including tennis, golf, fishing, spearfishing, scuba diving, and hiking.

Jan Fourie

Director |  Attorney, Notary & Conveyancer | BA. LLB

Jan graduated in 1974 with a five-year BA LLB degree from the University of Stellenbosch, whereafter he was admitted as an advocate and prosecuted as such in the Cape Town and Wynberg Courts. In 1974, he joined Swemmer & Levin as the Candidate Attorney of Mr Levin (founding member) and was admitted as an attorney on 7 April 1976, as a conveyancer on 11 January 1978, and as a Notary on 19 December 1984. Since 1974, he has served in various committees, including the West Coast Chamber of Commerce, the Vredenburg School Committee, and the Malgas Lions Club. In 2004, he also joined the company of PP Smit Attorneys.

Furthermore, Jan was the author of the first bilingual law book, The New Debt Collecting Procedures (Die Nuwe Skuldinvorderingsprosedures), which was used by all the Magistrate Courts throughout South Africa. With the founding of the Small Claims Court in Vredenburg, Jan served as one of the first Commissioners.