i What this calculator does
Quick answer: Compare paying extra into your bond against investing the same amount, after tax, at the current 10.75% prime rate. With the default inputs (outstanding bond 1 200 000, bond interest rate 10.75), it returns interest saved on the bond of R533 023.36.
Paying an extra amount into your bond gives a guaranteed, tax-free return equal to your bond rate. Investing the same amount gives an uncertain return that is taxed. With prime at 10.75% after the September 2026 increase, that guaranteed return is high.
This compares both over the same period: the interest saved and the term shortened on one side, the after-tax investment value on the other.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
How to use the Bond vs Invest Calculator
No setup is required. Every input holds a usable value, so the first change you make is the one you learn from.
- 1. Outstanding Bond (R)
- 2. Bond Interest Rate (%) Prime is 10.75% from 25 September 2026
- 3. Years Remaining
- 4. Extra Monthly Amount (R)
- 5. Expected Investment Return (%)
- 6. Your Marginal Tax Rate (%)
The result panel reports:
- Interest Saved on the Bond Guaranteed and tax free
- Investment Value After Tax Uncertain, over the same period
Alongside the headline figures, the calculator reports normal monthly payment, with extra, total invested, tax on the gain. Those are the numbers that usually explain why the headline result came out where it did.
Beneath the result the calculation is broken out in order, so nothing about the method is hidden.
See also: CAGR Calculator.
Common results
What the calculator returns as the outstanding bond changes, with every other input at its default (bond interest rate 10.75, years remaining 18, extra monthly amount 2 000, expected investment return 11, your marginal tax rate 31).
| Outstanding Bond | Interest Saved On The Bond | Investment Value After Tax | Bond Paid Off |
|---|---|---|---|
| R300 000 | R253 253.67 | R243 265.12 | 11.1 yrs early |
| R750 000 | R434 563.06 | R467 271.33 | 7.3 yrs early |
| R1 500 000 | R577 396.86 | R677 726.88 | 4.7 yrs early |
| R2 500 000 | R667 787.21 | R829 097.49 | 3.2 yrs early |
| R5 000 000 | R758 988.47 | R996 061.52 | 1.8 yrs early |
| R10 000 000 | R815 770.07 | R1 106 754.96 | 0.9 yrs early |
Figures used in this calculator
The South African constants this calculator relies on, with the page that holds the current value and the date it was last verified.
- Prime lending rate: 10.75% from 23 September 2026. Source: Prime Lending Rate History (verified 27 September 2026).
- Repo rate: 7.25% from 23 September 2026. Source: SARB Repo Rate History (verified 27 September 2026).
- Transfer duty: Zero to R1,210,000, then banded rates. Source: Transfer Duty and Property Taxes (verified 29 September 2026).
- Primary residence CGT exclusion: R3 million. Source: Capital Gains Tax Rates and Exclusions (verified 15 October 2026).
How the calculation works
Six inputs drive the result: Outstanding Bond, Bond Interest Rate, Years Remaining, Extra Monthly Amount, Expected Investment Return and Your Marginal Tax Rate. Bond Interest Rate: Prime is 10.75% from 25 September 2026. The normal payment is R1 200 000.00 over 216 months at 10.75% = R12 583.02. The with extra is R12 583.02 + R2 000.00 = R14 583.02. The interest saved is R1 517 931.94 - R984 908.58 = R533 023.36. The invest instead is R2 000.00 a month for 150 months = R639 355.68. The breakdown also lists outstanding balance, bond rate, interest without extra and interest with extra.
A worked example in rand
Run it with the inputs it opens with, outstanding bond R1 200 000, bond interest rate 10.75%, years remaining 18, extra monthly amount R2 000, expected investment return 11% and your marginal tax rate 31%, and the interest saved on the bond comes out at R533 023.36, guaranteed and tax free. The other figures are investment value after tax R603 475.58 and bond paid off 5.5 yrs early. Now set the outstanding bond to 2 400 000: the interest saved on the bond moves from R533 023.36 to R661 225.19, the investment value after tax moves from R603 475.58 to R811 061.88 and the bond paid off moves from 5.5 yrs early to 3.3 yrs early.
How to read the result
For the default case the verdict is: "Investing is ahead by R70 452.22, but only if the market delivers 11.0% a year. The bond saving is certain." Read it as a flag rather than advice: it tells you where the numbers sit relative to the usual rules of thumb. Run the affordability test at prime plus two percentage points: South African loans are mostly variable rate and the rate you qualify at is not the rate you will pay throughout. JSE Bond Market Reference explains the thinking behind these figures.
The South African angle
Using the bond vs invest calculator from South Africa adds a few local facts to the arithmetic. The National Credit Act caps the interest a lender may charge on personal loans, currently at the repo rate plus 21% for unsecured credit, which is the ceiling the personal loan calculator should be read against. Bond originators are free to the buyer in South Africa and are paid by the bank, so an affordability figure should be tested against more than one bank's rate offer. Capital gains tax on a primary residence only applies to the gain above R3 million, which removes the tax from the rent-versus-buy comparison for most homes. The bond vs invest calculator draws on the same figures, which are kept on the prime lending rate history and updated as they change.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
Frequently asked questions
Is paying off my bond really a guaranteed return?
Effectively yes. Every rand of capital repaid stops accruing interest at your bond rate, and that saving is not taxed. At a 10.75% bond rate, an extra payment is equivalent to a tax-free return of 10.75%, which a taxed investment would have to beat by a meaningful margin.
Does the money stay accessible?
It depends on the facility. An access bond generally lets you draw the extra payments back, which keeps the money available. A straight capital reduction does not, and re-borrowing means a new application. Check which one you have before committing a large amount.
Should I use the tax-free allowance instead?
Often yes, for part of it. Returns inside a tax-free savings account are exempt from income tax, dividends tax and capital gains tax, which removes the tax disadvantage from the investment side entirely. The annual allowance is capped and does not carry over.
What if interest rates fall?
A lower bond rate reduces the guaranteed return from extra payments, which shifts the comparison toward investing. The SARB raised rates in September 2026 and meets again in November, so the assumption is worth revisiting rather than fixing once.
Does this account for inflation?
Not directly, because both sides are affected similarly. What it does account for is tax, which affects only the investment side and is the larger distortion in this comparison.
Is there a middle option?
Yes, and most people take it. Splitting the extra amount between the bond and an investment gives a guaranteed partial return and keeps some exposure to market growth, without needing to be right about which wins.
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