Governor of the SA Reserve Bank, Lesetja Kganyago, on Thursday hiked the repo rate by another 75 basis points in a blow to the wallets of already suffering South Africans.
The latest move, effective Friday, 25 November, brings the repo rate to 7% and the prime lending rate to 10.5%.
Three members of the committee preferred the announced rate, while the other two had opted for a 50 basis point hike.
The hike is the third consecutive upward rate adjustment of 75 basis points.
“High inflation and weak economic growth continue to shape global conditions alongside monetary and fiscal policy responses. Russia’s war in Ukraine drags on, impairing trade and raising prices of a wide range of energy, food and other commodities,” Kganyago said.
What does the latest increase mean for those with monthly bond repayments to pay?
On a home loan of R1 million at the prime rate (10.5%), the latest hike will increase payments by R499 a month, while a R2 million bond outstanding with now cost R998 more each month.
The table below shows both ‘old’ and ‘new’ monthly bond repayments on various outstanding bond values (assuming your repayments are at prime):
Bond value (20 years)Old monthly cost (9.75%)New monthly cost (10.5%)ChangeR750 000R7 113R7 488+R375R800 000R7 588R7 987+R399R850 000R8 062R8 486+R424R900 000R8 536R8 985+R448R950 000R9 010R9 485+R474R1 000 000R9 485R9 984+R499R1 500 000R14 227R14 976+R748R2 000 000R18 970R19 968+R998R2 500 000R23 712R24 960+R1 247R3 000 000R28 455R29 951+R1 495R3 500 000R33 198R34 943+R1 745R4 000 000R37 940R39 935+R1 994R4 500 000R42 683R44 927+R2 244R5 000 000R47 425R49 919+R2 493