BREAKING NEWS: SA Reserve Bank Increase Prime Lending Rate To 8.25% - Repo Rate - 4.75%
The SA Reserve Bank's MPC hiked the repo rate on 19 May 2022, to 4.75% and the prime rate to 8.25%.
On a home loan of R1 million over a 20 year period, the bond repayment will increase from R8 209,49 p.m. (previously 7,75%) to R8 520,66 - an monthly increase of R311,17.
South Africans have during the last 2 years enjoyed record-low interest rates. According to Carl Coetzee, CEO of Betterbond, the recent increases in interest rates has not dampened the banks' appetite to lend. BetterBond has seen an almost 10% increase in the ratio of formally granted bonds for April, year-on-year, which is significant coming off the high base set last year. With some banks offering loans of up to 105% for qualifying applicants, there are options for aspirant homeowners.
South African property owners and buyers are still in single digit territory with the prime lending rate below the 10% it was before the pandemic, and there are still opportunities for buyers across all price bands to invest in property.
Working with a bond originator is definitely recommended - as "creating competition amongst banks" will assist buyers to secure a lower interest rate which will have a favourable impact on bond repayments as the interest rate cycle moves upwards.