Consumers are faced with a perennial choice at this time of year. Should they spend that precious yearend bonus on the short term imperatives of turkey and booze or put it into their home loan thereby reducing the term of the bond and saving thousands of rand in interest?

“Feeding your bonus or a portion thereof into your home loan is just about the best investment you can make and can relieve the long term pressure of debt stress,” says Simon Stockley, CEO of Integer Home Loans.

The numbers are quite shocking.

If you pay a R5000 lump sum annually in your bonus month for the lifetime of a R500 000 loan it could reduce the overall cost of your bond by R313 553 and shave off five years and two months from the repayment term.

A once off payment of a salary of about R15 000 paid into a R500 000 home loan, with an interest rate of 14.5% and terms over 240 months, can reduce the term of your bond by eleven months and save R63 351 in interest.