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It’s officially cheaper to buy than to rent
Marko van der Walt
16 Sept 2020
The record-low interest rates have already encouraged many first-time buyers to enter the market, and for good reason. At the current interest rate of just 7% (prime*), and with room for another cut before the year is out, it is possible that the monthly repayments on a home loan will cost less than the rent on the same property, making it cheaper to buy than to rent.
For example for a 1 bedroom unit in Emberton Estate in Hillcrest will cost you R825 000, your monthly repayments with the interest rate right now will be R6396 and renting that same apartment your monthly rent will be R7500. Same can be done with a larger unit; a 3 bedroom townhouse can will cost you R1 995 000 with monthly repayments of R15 467 at 7% interest rate and for a similar property to rent could cost you R18 000 per month.
So for those of you who can afford to do so, there is no better time to upgrade or to get your foot on the property ladder. I do suggest to leave room in your budget for if and when the interest rate returns to pre-lockdown numbers.
*disclaimer; individual interest rates will be determined by the banks dependant of personal credit profile
If you would like to know more about Emberton Estate, give one of our agents a call