Interest rate drop: What it means for your bond repayments
The SARB cut the repo rate by 25 basis points, offering extra financial relief to homeowners and potential property buyers.
The South African Reserve Bank (SARB) cut the repo rate by 25 basis points on Thursday, reducing it from 7.25% to 7%, a move aimed at easing financial pressure on homeowners and potential property buyers.
The prime lending rate also dropped to 10.5%.
All six members of the Monetary Policy Committee (MPC) unanimously agreed to the rate cut during their latest meeting.
The adjustment aligns with the expectations of most economists and analysts, who had anticipated a small cut despite the backdrop of global uncertainty, particularly the looming imposition of a 30% tariff on South African exports to the United States starting on Friday, 1 August.
Global and Local Pressures
SARB Governor Lesetja Kganyago highlighted the ongoing volatility in global economic conditions, pointing to rising US tariffs as a source of added instability.
He explained that South Africa’s struggling domestic economy influenced the Monetary Policy Committee’s decision to ease monetary policy and offer some relief.
Although some analysts expected the bank to pause and evaluate the impact of the looming tariffs, the SARB chose to act immediately, seeing the current climate as a chance to stimulate growth without triggering inflation.
This rate cut continues the bank’s cautious easing cycle and may be the last for a while, depending on how global trade tensions and local inflation trends develop in the coming months.
Who are the SARB’s MPC?
The South African Reserve Bank’s monetary policy committee meets every second month to announce changes – if any – to the country’s repo and prime lending rates.
The meetings in 2025 are scheduled to take place in January, March, May, July, September and November – and always on a Thursday at 15:00.
Currently, the committee comprises of six people, with Lesetja Kganyago holding the position of governor of the SARB – and the deciding vote if necessary.
| Month | Date | Outcome |
| January | 30 January | 25 basis point cut |
| March | 20 March | No change |
| May | 29 May | 25 basis point cut |
| July | 31 July | 25 basis point cut |
| September | 18 September | TBA |
| November | 20 November | TBA |
Monthly bond repayment table
The table below shows the now old monthly bond repayments on various bond values over a 20-year period assuming no deposit and repayments at prime.
It also shows the new monthly bond repayments after the 25 basis point cut as well as what the monthly saving will be.
| Bond | Old | New | Saving |
| R750 000 | R7 614 | R7 488 | R126 |
| R800 000 | R8 122 | R7 987 | R135 |
| R850 000 | R8 629 | R8 486 | R143 |
| R900 000 | R9 137 | R8 985 | R152 |
| R950 000 | R9 645 | R9 485 | R160 |
| R1 000 000 | R10 152 | R9 984 | R168 |
| R1 500 000 | R15 228 | R14 976 | R252 |
| R2 000 000 | R20 305 | R19 968 | R337 |
| R2 500 000 | R25 381 | R24 960 | R421 |
| R3 000 000 | R30 457 | R29 951 | R516 |
| R3 500 000 | R35 533 | R34 943 | R590 |
| R4 000 000 | R40 609 | R39 935 | R684 |
| R4 500 000 | R45 685 | R44 927 | R758 |
| R5 000 000 | R50 761 | R49 919 | R842 |