Make 2025 your best year with these financial resolutions

Published January 2025

Buying a new home is an exciting investment, but one that requires careful consideration and financial planning,” says Bradd Bendall, BetterBond’s National Head of Sales. “Whether you are looking at investing in property in 2025, or you would like to tighten up your finances so that you can make the most of the lower prime lending rate as we start the new year, these financial resolutions will help keep you on track.”

Know how much you can afford

Before you even start swiping through property websites in search of your dream home, make sure you know how much you can afford to spend, advises Bendall. BetterBond’s online affordability calculator will use your monthly income and expenses to work out your monthly repayment at the current prime lending rate. “Affordability is always a consideration, whether you are buying your first home or building on your property portfolio. Bear in mind that the prime lending rate may fluctuate, so aim to spend a bit less on your home than what the affordability calculator suggests. This financial resolution ensures you have some leeway if the prime lending rate changes. 

Get your finances in order

Now that you have a better idea of what you can afford, make a conscious effort to reduce non-essential spending. “Since there are many extra costs associated with buying a home, having additional financial reserves will be helpful,” says Bendall. Set up an automatic savings account if possible. Transfer costs and conveyancing fees can quickly rack up, so make sure you have some extra funds available.

Clean up your credit score

Banks look closely at your credit score when you apply for a bond, so make sure there are no arrears on any accounts and that all bills are paid timeously and in full, says Bendall. While it’s important to settle your accounts each month, don’t close all your accounts when they are paid in full. “Some credit is advisable because it shows that you can commit to a payment plan.” 

Check on the status of your credit score by drawing a report from a reputable credit provider such as Experian or Credit Score. “Banks decide whether to approve or decline your application based on your history of meeting financial obligations. BetterBond will submit applications to multiple banks on your behalf to secure the best interest rate. Your credit score is one of the factors that will influence the result.”

Save for a deposit

While it’s possible to get a 100% bond, being able to put down a deposit will help you save on your home loan in the long term. By contributing towards a deposit, the household income required to qualify for the bond will drop, adds Bendall. “A deposit will also lessen your monthly bond repayments.” Furthermore, making a large deposit will improve your chances of getting your loan approved. It will also strengthen your position to secure a significantly lower interest rate, because it reduces your risk profile.

Get online pre-approval

Bendall says applying for pre-approval not only accelerates the bond application process when you're ready to make an offer on a home, but it also boosts your chances of approval. “BetterBond’s clients who pre-approve first have a 95% approval rate on applications.” 

Protect your assets

Most banks will automatically provide some insurance for your home. However, it is better to shop around to source the best cover for your needs. Ask questions about your premiums, excesses and exclusions. Homeowner’s cover will protect your home’s physical structure: walls, fixtures, light fittings and garages. “Note that you must cover your home according to its correct value. If you think your home is underinsured, have your home valued by an independent valuator,” says Bendall.

Use your bonus wisely

If you were fortunate enough to get a 13th cheque at the end of the year, consider paying extra on your bond repayments. Bendall explains that increasing your monthly bond payments can greatly reduce the total interest paid over the life of the loan. "Any additional payments made toward your bond will lower the outstanding balance. This will decrease the interest paid throughout the loan term." For example, paying an extra R1,000 a month on a R2 million bond will reduce the interest payable by R521,498. It will also shave three years off the repayment period. 

Set up an emergency savings fund

Buying and owning a home is a costly exercise. “In addition to initial expenses associated with buying a home – from transfer duty and conveyancing costs, to paying for movers and home inspections – there is also the ongoing cost of maintenance and repairs,” Bendall points out. Set up an automated savings transfer so that you have some financial reserves for unexpected home repairs.

With these financial resolutions as a guide, 2025 should be a bumper year for homeowners and aspirant buyers, concludes Bendall.