I took out a bond of R140,000 in 2000. Now in 2025, my balance is still more than R100,000. What can I do about this?

The long answer

In South Africa, the most common home loan term is 20 years. Even with a longer, less-common 30-year term, after 25 years most of the capital should have been repaid.

An article by Maya Fisher-French on Money called “The stubborn home loan debt” says that in the first few years, you are mainly paying interest on the loan rather than reducing the capital amount you borrowed. 

She explains that this is because of how amortisation works: amortisation is the process of spreading the loan repayments so that the loan is completely paid off by a certain date. So, part of the payment you make each month goes to paying interest on the loan and the rest of the payment goes towards reducing the principal amount (the R140,000). 

Fisher-French explains that the amount allocated to capital does not match the amount paid for interest until after 13 years (by month 160). From this point on, however, she claims that as a larger portion of your repayment goes towards the principal debt, the outstanding mortgage decreases dramatically each month. Almost all of your payments in your last year are used to settle the principal.

According to her, you must make larger monthly payments if you wish to lower your outstanding mortgage sooner. She explains that since interest is already subtracted from your agreed-upon monthly instalment, any additional rand you pay goes straight towards settling the principal amount.

The general rule with any debt, according to her, is that the more you pay, the less interest you owe. You will incur more interest costs the longer you take to repay a debt.

If you still owe more than R100,000, this could be for one or more of the following reasons:

• Missed or reduced payments: if there were any times when you skipped payments, paid less than the full monthly payment, or renegotiated lower payments with the bank, this would extend the term of your loan and increase the total interest paid.

• If your bond allowed a revolving credit facility where you could borrow additional funds (for example, for renovations, education, or other debts), this would increase the capital owed.

• Interest rates have gone up and down a lot since 2000: rates were high then, and were very low in 2020 before going up again. Periods of high interest rates mean more of your payment covers interest, and this means the capital amount you owe is not reduced as much.

So, to understand why your capital amount is still over R100,000, you should contact your bank and ask for a full detailed statement of your bond account from the starting date in 2000 up to the present. This statement would show exactly how your payments were allocated (capital versus interest) and any additional withdrawals or fees added.

You should also ask to speak to one of the bank’s financial advisors for advice.

Wishing you the best,
Athalie