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ABSA Home Loan Rates

ABSA bank provides home loans at affordable interest rates so that the customer is not burdened by the housing loans availed by him/her. The bank offers home loans not only to buy a house but also for constructing or building a house, invest in property, furnish an existing house and even to refinance an existing loan. This existing home loan can be that which has been availed by a different financial institution in South Africa.

ABSA Home Loan Interest Rates

ABSA home loan interest rates are offered in two types. They are mentioned below:
  1. Variable Interest Rate
  2. Fixed Rate of Interest
Variable Interest Rate: The variable interest rate fluctuates on the basis of prime lending rate which is set by the ABSA bank. This gives the customer a chance of negotiating for a concession with bank. In case the bank changes the rate of interest, the monthly repayment of the customer also changes. The interest rate determined by the variable rate of interest is based on the market value of the property and the customer's financial potential.

The bank offers flexibility in switching over from the variable interest rate to the fixed rate of interest any time as and when the customer wishes to do so. The bank does not offer this rate for a fixed period as it is available only for an initial period. Whenever there is a fluctuation in the prime lending rate, the rate of interest charged by the bank and the repayments made by the customer also fluctuates. If you opt for a housing loan amounting to R400,000 for a period of 20 years then the interest rate at 13% would be R4,686; at 14% it would be R4,974 and at 15% the interest rate charged would be R 5,267.

Fixed Rate of Interest: As the name suggests, a fixed rate of interest is the rate which does not change for a long time because it is fixed by the bank. The fixed interest rate is also set for a specific time period which is definitely more than that set by the variable interest rate. If the bank decides to renew their charges, then the prime lending rate will also change causing a change in the variable interest rate as well as the fixed rate of interest. However, there is a very little chance of the fixed rate of interest changing. The fixed rate provides protection against increase in prime lending rates. The customer has the right to terminate the fixed interest rate option before the agreement expires. The customer can then switch over to a variable interest rate provided the agreement of the fixed rate of interest has expired. Fixed rate makes the customer to pay the same amount as repayment without any additional costs unlike the variable rate of interest. Thus, it provides protection against the rising interest rates. Please note that the bank has all the right to change and renew its home loan rates whenever it wishes so. It might not give a prior notice to the public. Therefore, for current ABSA home loan rates you may visit the link given below:

http://www.absa.co.za/absacoza/content.jsp?/Home/Personal/Products-and-Services/Loans/Home-Loans/Solutions/Interest-Rates .


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