Annual Interest Rates

It is common knowledge that due to the wonderful thing called inflation interest rates will go up on an annual basis. This is the same when it comes to taking out a home loan from CKM Home Loans, as is from any other financial lender in South Africa. When applying the notion of the annual interest rate to the home loans of CKM Home Loans, the home loan monthly repayment amount which was initially agreed upon between the two parties involved attracts interest. These monthly repayments are proportionally applied to cover, first the interest portion of the amount due, and then the capital portion.

For the holder of a home loan making regular monthly repayments over the term of the loan, which is usually over a period of twenty years, means that the overall interest due on the loan can be greatly minimized. The monthly repayment amounts of a home loan is calculated on the daily outstanding balance of the home loan and capitalized on the installment due date. What this means is that the account of the holder of a home loan is charged on the date of installment payment.

In terms of the annual interest rate, this can either be fixed or can fluctuate. The fixed annual interest rate is an interest rate which is agreed upon and remains the same over the specified home loan repayment term. After this end-date of this term has passed, the interest rate becomes a fluctuating rate, unless the option to renew the fixed interest rate has been opted for and negotiations have been made and agreed upon. When the end of the term of a fixed interest rate is close, the fluctuation of variable interest rates need to be monitored so as to identify the difference in rates between the fixed and variable options.

To define the variable annual interest rate, this option is one which continually changes, and is based on the home loan lending rate as set by the Reserve Bank from time to time. With regard to the variable interest rate it should be noted that even though this rate is in general the same as the Prime lending rate, it does not necessarily always have to reflect this. The home loan holder who has opted for this option has monthly repayments which are calculated to pay the loan plus the annual interest rate over the agreed term of loan, which is usually the term of 20 years. The disadvantage of opting for this option is that in the case that the annual interest rate changes, so will the amount of the monthly loan repayments.

When applying for a home loan from a financial institution such as CKM Home Loans, the annual interest rate that is offered at the end of the day will be based on creditworthiness and as such the applicant's noted ability to replay the home loan being requested. As mentioned, making regular monthly loan repayments means that the holder of a home loan can properly service their loan and in turn reduce the percentage of their annual interest rate. For those with a good credit profile, CKM Home Loans is able to negotiate a minimal annual interest rate with a bank which can start from as little as PRIME MINUS 2%.

CKM Home Loans does not give finances to their clients but their job is to rather act as the negotiator between client and bank to make ensure that the final agreements made are in the best interest of both parties involved. To elaborate, CKM Home Loans has the interests of both their clients and the bank involved and strives to ensure that both leave satisfied with the home loan which has been granted. Even though this is so, CKM Home Loans is however more focused on the needs of their clients, and will do everything in their power so as to ensure the happiness of these above the bank.

CKM Home Loans is here to help you negotiate the best home loan and in turn the minimal annual interest rate for you. So why not let the experts of CKM Home Loans handle all the paper and relax knowing that at the end of the day you will get the home loan you really want and need.