Interest Only Bonds

In order to improve monthly cashflow on a property, one of the best methods used, is to convert your mortgage loan to an Interest Only Property Loan.

Example :

Traditional Capital and Interest Repayment Model

Bond                     R 50 million

Term                     10 years

Interest                Prime plus 1 % ( 11.25 % )

Repayment         R 695 844 pm

Interest Only Model

Bond                     R 50 million

Term                     5 years ( plus 5 years if account handled well)

Interest                Prime plus 1 % ( 11.25 % )

Repayment         R 468 750 pm

32 % Cash Flow Improvement – R 227 094 pm x 12 =  R  2 725 128 pa

Loan Criteria

Loan To Value                                                    Maximum  75 %

Ownership                                                         3 years minimum

Property Type                                                    Retail, Office and Industrial

Vacancies                                                          Not more than 5 %

Interest                                                              Prime plus 1 % to Prime plus 3 %

Fixed Interest                                                    Option to Fix Interest Rate for 5 years.

Loan Values                                                       R 20 million to  R 80 million

 

Advantages

Massive Cashflow Improvement

Unlock Capital – Equity to Cash

Turn Negative Cashflow into Positive Cashflow

Refinance Commercial Property Loan

Refinance Industrial Property Loan

Quick responses

 

General Notes

• The interest only property strategy on commercial property is unique in South Africa. We facilitate your cashflow improvement strategy, with an Interest Only Mortgage Loan
• Interest Only Commercial Property Loans and an Interest Only Industrial Property Loan are available for retail, office and industrial properties that have been owned for longer than 3 years.
• A tenanted Retail Centre, Office Block or Industrial property, valued at more than R 20 million up to R 80 million,  can make use of an Interest Only Mortgage.
• You can also Refinance Commercial Property with an Interest Only Bond, and in so doing reduce your monthly repayments.
• Switching to interest only mortgage, is a simple process because interest only mortgage lenders are motivated to lend money because these are private funds, allocated to this loan program.
• Our commercial mortgage refinance packages can be ‘rolled over’ ( renewed ) at the end of each 5 year term, subject to lenders conditions.
• To secure a mortgage bond interest only, will require the same application process as a normal bond application BUT is a much quicker process.

 

FAQ’s

Loan Values?

R 20 million to  R 80 million

How Quick?

Approx 30 days from when all the documents requested, have been provided

Is there any risk to me?

No, as long as you comply with all the terms and conditions of the mortgage bond agreement

Can I purchase a property using the Interest Only Mortgage Loan?

Not at this time. It is only for existing property owners.

Is this applicable to homes?

Sorry, no. Only commercial and industrial properties.

What types of property can be used?

Warehouses, Shopping Centres, Factories, Hotels, Student Accommodation, Office Blocks, Apartment Blocks etc.

What is the advantage?

Cashflow is immediately improved by approx 30 %

How long is the Interest Only Property Mortgage?

5 years with option for another 5 years.

When do I pay the capital back?

Within 5 years ( at end of 5 year term )

 Can I extend the bond for more than 5 years?

Yes, if the account is been well handled, it is possible for another 5 years.

How do I pay the capital back?

By securing a bond from a normal banking institution

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