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Is A Flexi/Access Bond The Right Option For You?

“Dear Phoenix Bonds, I am encouraged by the excellent and warmly service that my nephew says he received from you. I am writing to you because I have also decided to utilise your services in purchasing my first immovable property. However, may you kindly assist me to understand what a Flexi/Access Bond facility is? Thanking you in advance.

Adriaan, Bedfordview

 

At Phoenix Bonds we love interacting with our valued clients, especially when they have queries about the various products in the home loans market. To us, it means we are making a real difference in the lives of our clients and that is what we will continue to do going long into the future.

 

It is true that there are a number of products in the home loans market, resulting in many home buyers requiring assistance and advice as to which products would be best to go with. In this instalment we will explain what an Access/Flexi Bond facility is and how it works.

 

  1. What is an Access/Flexi Bond facility?

The access facility is basically another account wherein the surplus on bond repayments is paid into, and accessible to the customer when required.

 

  1. How and when do you apply?  

It is noteworthy that all the four Big banks offer an access facility on a home loan account, and it is up to the home buyer to request the facility when the bond is applied for at either ABSA or FNB. With Nedbank the facility is granted automatically to the home loan, whilst with Standard Bank the facility can be applied for after the registration of the bond.

 

  1. How does an Access/Flexi bond account work?

For the sake of clarity, only the surplus balance can be accessed and not the minimum bond repayment amounts. We shall use the below example to drive the point home: 

Minimum monthly bond repayment amount:

R 6 300

Actual monthly amount paid:

R 10 000

Period in consideration

12 Months

Total amount paid

12 months X R10 000 = R 1 20 000

Total minimum repayment amount for the period

R 6 300 X 12 months = R 75 600

Access amount

R 1 20 000 – R 75 600 = R 44 400

 

From the above example the amount that will be available and accessible to the customer is R44 400, as this is the amount that is over and above the total minimum monthly bond repayment for the period in consideration. 

 

     4. Options for the additional funds

The customer has the privilege to elect what exactly the additional funds will alleviate, either interest or the loan term. 

 

     5. Criteria at the four Big banks

ABSA’s Flexi Reserve is applied for when the home loan application is made, and the customer does not have to have an existing transactional account, whilst at FNB and Standard Bank the applicant must have an existing one or must open one. At Nedbank, the customer must have at least a transactional account (not need to be the primary one) to transfer the funds out.

 

We welcome queries that you may require us to clarify on and we will address these as they come in. Phoenix Bonds specialises in bond origination and bridging finance. We assist home buyers to find mortgage bonds that have favourable terms, thereby saving you time and saving you money.

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The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages.

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