Bond Amortisation Calculator
Full year-by-year and month-by-month amortisation schedule with principal vs interest chart
Three levels of detail — pick yours
Loan amount, interest rate, term — instant monthly payment, total interest, and amortisation overview.
Stacked area amortisation chart, full year-by-year table with crossover highlight, monthly schedule, extra payment impact.
Mid-term rate changes, extra monthly and annual lump-sum payments, bank fees, NCA insurance, LTV tracking, rate × term sensitivity matrix.
Understanding Bond Amortisation How it works • Crossover • Example
How Home Loan Amortisation Works
Each monthly bond payment is split between interest and principal reduction. In the early years, the vast majority of your payment covers interest. As the outstanding balance reduces, more of each payment goes toward principal.
South African home loans use monthly compounding: the monthly interest rate is the annual rate divided by 12. This differs from some international markets that use daily compounding.
The Monthly Payment Formula
Where:
- P = principal loan amount
- r = monthly interest rate (annual rate ÷ 12)
- n = total number of monthly payments (years × 12)
The interest component of each payment = outstanding balance × r. The principal component = PMT − interest.
The Interest–Principal Crossover
For a typical 20-year bond, the crossover point — where you pay more principal than interest in a single month — occurs only around year 11 or 12. This highlights why extra payments made early in the loan have a disproportionately large effect on total interest paid.
The Extended tier highlights this crossover year in the amortisation table, and the Professional tier models exactly how extra payments accelerate the crossover date.
Worked Example
Thabo takes a R1,400,000 bond at 10.25% over 20 years.
Monthly payment: R13,830/month
Month 1: Interest = R11,958, Principal = R1,872
Month 120 (year 10): Interest = R9,217, Principal = R4,613
Total interest over 20 years: R1,919,200 — more than the original loan amount.
If Thabo pays an extra R2,000/month from day one, he saves approximately R455,000 in interest and pays off the bond in 14.5 years instead of 20.
Frequently Asked Questions
Why do I pay so much interest in the early years of my bond?
Because interest is calculated on the outstanding balance each month. When you first take out a bond, the balance is at its maximum — so interest charges are at their highest. As you pay down the principal, monthly interest decreases and more of your fixed payment chips away at the capital.
On a R1,400,000 bond at 10.25%, roughly 86% of your first payment goes to interest. By year 15, this reverses and over 50% goes to principal. The amortisation chart in Tier 2 visualises this shift clearly.
How do extra payments affect my bond amortisation?
Extra payments reduce the outstanding principal immediately, which reduces future interest charges on every subsequent month. This creates a compounding benefit — each rand paid extra saves multiple rands in future interest.
An extra R1,000/month on a R1,200,000 bond at 10.25% over 20 years saves approximately R280,000 in interest and cuts the term by nearly 5 years. Use the Extra Payment Impact tab in Tier 2 to model this for your bond.
What happens to my amortisation schedule when interest rates change?
When the SARB changes the repo rate (and banks adjust prime), your variable-rate bond is affected immediately. Most South African banks recalculate your monthly instalment effective from the date of the rate change.
A rate increase means a larger portion of each payment goes to interest, slowing principal reduction. The Professional tier allows you to model multiple rate changes at specific months to see the exact impact on your repayment schedule and payoff date.
What is LTV and why does it matter on my amortisation schedule?
Loan-to-Value (LTV) is your outstanding bond balance as a percentage of the property's value. When LTV drops below 80%, some banks offer a rate concession or remove mortgage protection insurance requirements.
The Professional tier tracks LTV month by month. For a R1,400,000 bond on a R1,555,556 property (10% deposit), the bond starts at 90% LTV and reaches 80% around year 4 to 5 at 10.25%. You can then request a rate review from your bank.
Does South Africa use monthly or daily compounding for home loans?
South African home loans use monthly compounding in arrears — interest accrues for the full month and is added at month end. This is different from daily compounding used in some countries.
The NCA requires lenders to disclose the effective annual rate (EAR) alongside the nominal annual rate. For a 10.25% nominal rate compounded monthly, the effective annual rate is approximately 10.74%.