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Interest Rate Unchanged


Interest Rate Unchanged

Category General

The South African Reserve Bank keeps the repurchase rate at 3.5%

(Home loan base rate of 7%)


With the lowest interest rate in 50 years, most of us haven't had the opportunity to buy a house at this rate in our entire lives.


There have been some mixed emotions about the decision to keep the rate the same, some would have liked to see it drop by another 25 basis points, others are excited as it allows for more people to enter the property market.


With the home loan base rate difference from 10% to 7% means that a reduction in bond repayment saving on a R1 million property would be just short of R2000 per month and about R450,000 on the total repayment term of a 20-year bond. Saving home owners around 30% and allowing them to pay more into their home loans or pay off other debt they may have.

What would it cost for you to buy a home at the current rate? The table below gives you a general idea.

Bond Value

Registration and bond costs required

Minimum gross salary required (before tax) at 7%

Monthly bond payment at 7% interest rate

Total paid with interest after 20 years

R850 000

R52 331

R21 966

R6 590

R1 581 621

R1 000 000

R55 712

R25 843

R7 752

R1 860 996

R1 500 000

R83 155

R38 764

R11 629

R2 791 212

R2 000 000

R123 107

R51 686

R15 505

R3 721 711

R2 500 000

R173 188

R64 608

R19 328

R4 651 927


It must be noted that even though the interest rate is at its lowest, purchasers should be cautious to leave some room in their budget as the interest rate could go up towards the end of 2021 early 2022.

In short if you were thinking about buying a house now would be a good time to buy and on the other end of the spectrum, if you are wanting to sell your house you now have a larger amount of new potential buyers for your property.


Author Property Nerds
Published 20 Nov 2020 / Views -

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