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Revised fees for home loans Press

Revised fees for home loans Press

<p><strong>The Department of Trade and Industry recently updated the maximum fees that credit providers are able to charge.</strong></p> <p>There has been a change in how interest rates are calculated as well as a general reduction in the maximum interest rates charged.</p> <p>According to the Department of Trade and Industry, the new maximum interest rates for all types of credit agreements will reduce the cost of credit for consumers.</p> <p>The final regulations will bring about reduction of cost of credit when consumers are applying for credit<br />says Sidwell Medupe, spokesperson, DTI.</p> <p>The new regulations will come into effect in May this year and will set a standard of maximum calculated amounts which credit providers will not be allowed to exceed or abuse.</p> <p>Currently the maximum interest that can be charged for home loans is 2,2 times the repo rate plus 5 percentage points. At current interest rates that would be 18,2% per annum. The new rate will be a maximum of 12 percentage points above the repo rate, or 18% per annum.</p> <p><strong>The new regulations will affect mortgage-initiation fees</strong> (what lenders may charge to consumers when they take out a loan) as follows: R1,100 plus 10% of the amount in excess of R10,000. The maximum charge must never be more than R5,250.</p> <p>Article from&nbsp;<a href="http://www.privateproperty.co.za/advice/news/articles/revised-fees-for-home-loans/4184">Private Property</a></p> <p>29th Jan 2016</p>