Reserve Bank Repo Rate to 6.50% | Prime at 10.00%
All economies and property markets go through cycles of ups and downs and many will tell you if only they had bought at a particular time. Despite hopes that the interest rate would be kept the same ahead of the festive season, the increase of 25 pts (increasing the base home loan rate to 10.25% from 10%), means home-owners and buyers will have continue tightening their belts. Although not unexpected, the announcement of increase by the Monetary Policy Committee (MPC) of the South African Reserve Bank came as a disappointment so close to the festive season. A reprieve would have given customers a much-needed financial break after all the increases they had to absorb this year. Now home-owners will now have to budget for higher instalments on their home loans and other debts. It is disappointing, but not unexpected that the MPC has chosen to increase rates at this meeting. The challenge now falls onto consumers who are already pinched by rising fuel costs, a weakening economy, and a month of increased expenses to keep up with the payments on their home loans and not fall behind on any other credit repayments.For home-owners with bonds, the interest rate increases announced by the Reserve Bank today will add at least R16,60 per R100 000 borrowed to their monthly repayment.
“So, on a 20-year loan of R1m, for example, the monthly instalment will rise by at least R166 and possibly more, depending on the current interest rate that the borrower is paying.
The interest rate decision, which will see the repo rate rise to 6,75% and the prime rate rise to 10,25%, will also mean higher monthly repayments on every other form of debt, including car finance, credit cards, store accounts and personal loans.
For more information on purchasing, renting or investing in commercial and industrial property in Cape Town, please contact Robert Ryll | Cell Number: 082 374 2662 | Landline: 021 552 4100 or Email: firstname.lastname@example.org
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