· Updated · Built around the Pay it off faster calculator
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On a 20-year bond at today's prime rate, you pay back more than twice what you borrowed. Most of that extra is interest in the early years, when the balance is highest. That is exactly why money paid in early does so much work: every rand off the balance stops being charged interest for the rest of the term.
Why it works
- Interest is charged on what you still owe, every month. Pay the balance down faster and next month's interest is smaller, so more of your normal repayment goes to the capital.
- An extra rand in the bond "earns" your bond rate - {{prime}} at prime today - and that saving is not taxed. A savings account has to beat that after tax to be the better home for spare cash.
- Most banks let you take it back out through an access facility, so the extra money is not locked away. Check your bank's terms, and whether your bond is linked to prime.
Move the extra payment
Before you pay extra
- Clear expensive debt first. A credit card at up to {{cc}} costs far more than a bond at prime - see how to escape credit card debt.
- Keep an emergency fund (the savings goal calculator works out the monthly saving) you can reach in a day - or make sure your bond's access facility counts as one.
- Rates move. The sums use one rate for the whole term. The interest rate change calculator shows what a hike or a cut does to your repayment.
- Your bank's rate may be below or above prime - put your own rate in the slider.
Run it on your own bond
Weighing extra bond payments against saving instead? The pay off debt or save calculator compares them. Not bought yet? The bond repayment calculator and bond deposit savings calculator show what a bigger deposit does from day one.
Sources
- Prime {{prime}} = SARB repo rate {{repo}} (raised 25 basis points from 25 September 2026, SARB MPC statement) + 3.5%, the margin South African banks use for prime. Rate as at 16 October 2026.
- The sums: month by month, interest at the yearly rate / 12 on the balance, then the repayment - the same method as the CalcSA pay it off faster calculator.
- Not verified from a primary source: access facility terms - they differ by bank and bond; ask yours.
Calculators used in this post
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