Monthly bond repayment, total interest and total cost over the term.
Monthly repayment
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Total interest
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Total cost
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Your breakdown
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Item
Amount
Worked example
Take a R1,500,000 bond at 11.5% a year over 20 years, a common setup near the prime lending rate. The monthly rate is 11.5% divided by 12, which is about 0.9583%, and the number of payments is 20 times 12, or 240. Putting these into the amortisation formula gives a repayment of R15,996 a month. Over the full term you pay R15,996 times 240, which is R3,839,147 in total. Subtract the original R1,500,000 and the interest alone comes to R2,339,147, more than the amount you borrowed. This is why even a small drop in the rate, or paying a little extra each month, saves a large sum over 20 years.
Step
Amount
Loan amount
R1,500,000
Rate and term
11.5% over 240 months
Monthly repayment
R15,996
Total interest
R2,339,147
Total cost over the term
R3,839,147
How it is calculated
A bond repayment is a level monthly amount sized so the loan and all its interest are cleared exactly at the end of the term. The formula takes the loan, multiplies by the monthly rate, then divides by one minus one plus the monthly rate raised to the negative number of payments. Early on, most of each instalment is interest and only a little reduces the balance, but that mix shifts toward capital as the years pass. Most South African bonds are linked to the prime lending rate, so your repayment moves whenever the Reserve Bank changes rates. The tool assumes a fixed rate for the whole term, which is useful for comparison even though real repayments vary with prime.
Frequently asked questions
How is a bond repayment calculated in South Africa?
The monthly repayment uses standard amortisation. The monthly rate is the annual rate divided by 12, and the number of payments is the term in years times 12. The repayment is the loan times the monthly rate, divided by one minus one plus the monthly rate raised to the negative number of payments. Most South African bonds run for 20 years at a rate linked to the prime lending rate.
What is the prime lending rate in South Africa and how does it affect my bond?
The prime lending rate is set by South African commercial banks at 3.5 percentage points above the repo rate, which is determined by the South African Reserve Bank. Most variable-rate bonds are priced at prime or prime plus a margin. When the Reserve Bank adjusts the repo rate, your monthly repayment changes accordingly on the next billing cycle.
Can I deduct bond interest from my income tax in South Africa?
SARS does not allow a deduction for home loan interest on a primary residence. Interest is only deductible when the property is used to produce taxable income, such as a rental property, and the deduction is limited to the rental income earned. Always confirm your specific situation with a registered tax practitioner before claiming any deduction.
How does transfer duty affect the total cost of buying a home in South Africa?
Transfer duty is a government tax paid by the buyer on properties not subject to VAT. For the 2025/26 tax year, no transfer duty applies on properties up to R1,100,000. Above that threshold, rates rise progressively up to 13% on the portion above R2,500,000. Transfer duty is a once-off cost paid at registration and is separate from your monthly bond repayment.