Prime Interest Rate increased to 11.25%

Prime Interest Rate increased to 11.25%

Category Property news

At the second meeting of the Monetary Policy Committee (MPC) for 2023, the South African Reserve Bank (SARB) increased the repo rate by 50 basis points to 7.75%, which takes the prime interest rate from 10.75% to 11.25%, effective from 31 March 2023.

This latest increase marks the ninth consecutive hike since the hike cycle began in November 2021, with a total adjustment of 425 basis points. The latest rate hike puts rates at their highest point in 13 years, since June 2009, when our currency was affected by the global financial crisis.

Reserve Bank Governor, Lesetja Kganyago, explained that the decision to hike rates is due to the persistently high inflationary environment, ongoing load shedding, global geopolitical tensions, as well as local and global economic growth challenges.

This latest increase puts further pressure on homeowners, as the cost of borrowing increases again. With prime lending at 11.25%, homeowners with variable-rate bonds and any other types of loans linked to the prime lending rate will see an increase in their monthly repayments.

Homeowners should assess their financial situation thoroughly and ensure they can comfortably afford their bond repayments. Those who see themselves at risk of losing their homes should seek guidance from their bank or property experts who can provide support and advice on how to either retain their current property or downsize to a more affordable home.

The Greeff Christie's area specialists possess comprehensive expertise and knowledge of the property market, making them a trusted source for guidance and assistance on how to make informed decisions about your property. Call us to speak to your area specialist and stay updated on the current value of your home as well as any shifts in the market.

Here's an indication of how this latest increase will impact your monthly bond repayments:

Use BetterBond's Bond Repayment Calculator to calculate your new repayment amount, if your bond amount is higher than what we've listed above.

Author: Greeff Christie's International Real Estate