Check the costs carefully before you make a loan from your retirement fund for a housing loan.
Chris Bvsenberg, Sanlam chief consultant: employee benefits says in the end it could be more expensive than borrowing from a bank, particularly with the new 17 percent tax on the interest income of retirement funds.
Because you have to pay interest, the fund has to pay 17 percent of the interest you pay to the taxman. The money you borrowed could have been better invested in an investment that would not have attracted tax. The result is your end benefits are reduced.
Bvsenberg says he is surprised retirement funds do not rather encourage members to borrow money for housing from banks with the member's accrued benefit providing collateral security.