Should you choose a 20 or 30 year term on your home loan? Lephoi Mokgatle, Executive Head of Nedbank Home Loans Digital shares the pros and cons to consider for each.
So 20-year versus 30-year loan term options. I think when making this decision, customers might want to consider what their financial priorities are at that particular time. While some customers feel that they would like for financial freedom of paying a lesser installment each month, others might have a long-term view which says, "I'd like to pay off my bond far quicker."
A 30-year loan term gives that financial relief every month so you end up paying less monthly installment every month. However, your interest portion of your payment is obviously bigger in the long term.
20-year loan term repayments allow you to pay off your bond far quicker, and also your interest portion of your debt becomes less than the 30-year loan term.