The South African Reserve Bank (SARB) has decided to maintain its repo rate at 7.0%, which means the prime lending rate remains at 10.5%. This decision offers some financial relief to homeowners with variable-rate mortgages, as they will not see an increase in their monthly payments at this time.
With the prime rate holding steady, a R2 million home loan spread over 20 years will continue to require a monthly payment of R19,968. Had the SARB elected to raise the interest rate by 25 basis points, borrowers would have faced an additional R335 in their monthly payments. This stability allows homeowners to avoid this potential increase.
Over the course of a 20-year mortgage, homeowners are expected to repay about R4.79 million, a figure that encompasses both the initial loan amount and total interest charges. This financial layout remains unchanged due to the SARB’s recent decision to keep rates as they are.
The decision was not unanimous within the Monetary Policy Committee, with a close vote of four in favor of maintaining the current rate and two advocating for a 25-basis-point increase. The latter group was driven by concerns over inflation, which remains a significant consideration for the committee. The SARB’s next interest rate meeting is set for 23 September 2026, where they will reassess the economic landscape and inflationary pressures.