Repo Rate Cut: How much property owners will save
Are you still paying the bond for your house? Here is what the repo rate cut means for your loan.
On 21 November, the South African Reserve Bank (SARB) announced that the prime lending rate decreased by 25 basis points to 11.25%.
The repo rate refers to the rate at which SARB lends money to private banks.
If the repo rate goes up, the bank's prime lending rate also increases, and customers who need to borrow money from the banks will be charged more. When it decreases, banks and customers also benefit.
Following the announcement, scores of South Africans took to social media to express their excitement, with #RepoRate trending on X.
READ: Cosatu urges SARB to cut repo rate amid cooling inflation
The news benefits not only those who are currently repaying their bonds but also potential homebuyers.
Property owners will have reduced monthly payments which can help them pay off their bonds quicker and save money in the long run.
Potential homeowners can also enjoy increased purchasing power and have better chances to qualify for a home loan.
GetGo Home Loans, one of SA's home finance companies, has released a breakdown of what the news means for those who took out a 20-year loan agreement for their properties and what potential homebuyers can expect to pay.
For instance, someone who took out a bond amounting to R750 000 will save an estimated R129 per month, while someone who took out a loan for R3 million will save as much as R515 per month.
See the breakdown below.
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