Bond Repayment Calculator Johannesburg

Calculation Summary
Category Loan Term
Monthly Payment
Loan Amount
Total Interest
Total Cost of Loan

How To Calculate Your Home Loan Repayment in Johannesburg

In calculating your home loan repayment you need to understand the loan amount, interest rate, and loan term.

Let’s explore a method to compute this with an example.

Step 1: Determine Loan Details

First, establish the principal amount, the interest rate per annum, and the number of years for the loan.

For this example, imagine you have taken out a loan of R1,000,000 at an interest rate of 7% per annum for a period of 20 years.

Step 2: Monthly Interest Rate

Convert the annual interest rate to a monthly rate. Divide the annual rate by 12 (the number of months in a year). Monthly rate = 7% / 12 = 0.5833%

Step 3: Total Loan Payments

Calculate the monthly payments you will make over the loan term. Multiply the number of years by 12.

Total payments = 20 years * 12 months/year = 240 payments

Step 4: Monthly Repayment Formula

Use the formula for an annuity to calculate the monthly payment. The formula is: P = [rPV] / [1 – (1 + r)^-n] Where:

  • P is the monthly payment
  • r is the monthly interest rate (as a decimal)
  • PV is the present value or principal amount of the loan
  • n is the total number of payments

Step 5: Apply the Formula

Insert the values into the formula.

P = [0.005833 * 1,000,000] / [1 – (1 + 0.005833)^-240]
P = 5,833 / [1 – (1 + 0.005833)^-240]
P = 5,833 / [1 – (1.005833)^-240]
P = 5,833 / [1 – 0.3025]
P = 5,833 / 0.6975 P = 8,363.64

So, your monthly repayment would be approximately R8,363.64.

Step 6: Confirm with an Amortization Schedule

An amortization schedule can provide a detailed breakdown of each payment, showing how much goes towards the interest and how much towards the principal balance.

Step 7: Adjust for Other Fees

Remember to include any additional fees (like origination fees, insurance, and property taxes) that might be part of your monthly housing payment.

Step 8: Double-check with a Mortgage Calculator

Use an online mortgage calculator specific to South Africa for verification.

Input the same details to confirm the calculation.

Example Summary

You borrow R1,000,000 at a 7% yearly interest rate to be paid over 20 years.

Monthly installments come to approximately R8,363.64, excluding any additional fees.

It’s advisable to use an amortization schedule for a payment breakdown and confirm with an online calculator.