SARB interest rate

The next rate announcement is scheduled for Thursday, 24 September with South Africans no doubt nervous at its outcome. Image: Adobe Stock

Interest rate hike: How much a R1 million bond will now cost

The SARB voted to hike interest rates by 50 basis points on Thursday. This is how much a R1 million bond will now cost every month.

SARB interest rate

The next rate announcement is scheduled for Thursday, 24 September with South Africans no doubt nervous at its outcome. Image: Adobe Stock

The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) voted to hike interest rates by 50 basis points on Thursday.

That decision took the country’s repurchase rate to 8.25% while the prime lending rate rose to 11.75%.

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The changes will come into effect from Friday, 26 May 2023.

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The latest interest rate hike marks the 11th in the current cycle, with the total adjustment being a massive 475 basis points since the hike cycle started in November 2021.

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According to Reserve Bank governor Lesetja Kganyago, the vote was unanimous, with all five members voting for a 50 basis point hike.

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What does the increase mean for those with monthly bond repayments?

On a home loan of R1 million at the new prime rate (11.75%), the latest hike will increase payments by R344 a month, while a R2 million bond outstanding with now cost R689 more each month.

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The table below shows both ‘old’ and ‘new’ monthly bond repayments on various bond values assuming no deposit and that repayments are at prime:

Bond value (20 years)Old monthly cost (11.25%)New monthly cost (11.75%)Change
R750 000R7 869R8 128+R259
R800 000R8 394R8 670+R276
R850 000R8 919R9 212+R293
R900 000R9 443R9 753+R310
R950 000R9 968R10 295+R327
R1 000 000R10 493R10 837+R344
R1 500 000R15 739R16 256+R517
R2 000 000R20 985R21 674+R689
R2 500 000R26 231R27 093+R862
R3 000 000R31 478R32 511+R1 032
R3 500 000R36 724R37 930+R1 206
R4 000 000R41 970R43 348+R1 378
R4 500 000R47 217R48 767+R1 550
R5 000 000R52 463R54 185+R1 722