Interest rate hike: How much more your bond will now cost [table]
The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) voted to hike interest rates by 50 basis points on Thursday, taking the country’s repurchase rate to 7.75%. The prime lending rate will increase to 11.25%. The changes will come into effect from Friday, 31 March 2023. ALSO READ | DStv price hike: What you’ll pay from 1 April – it’s NO […]
The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) voted to hike interest rates by 50 basis points on Thursday, taking the country’s repurchase rate to 7.75%.
The prime lending rate will increase to 11.25%.
The changes will come into effect from Friday, 31 March 2023.
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The latest interest rate hike marks the 10th in the current cycle, with the total adjustment being a massive 425 basis points since the hike cycle started in November 2021.
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According to Reserve Bank governor Lesetja Kganyago, the vote was not unanimous, with three members voting for a 50 basis point hike and two preferring a 25 basis point move.
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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 (11.25%), the latest hike will increase payments by R341 a month, while a R2 million bond outstanding with now cost R680 more each month.
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The table below shows both ‘old’ and ‘new’ monthly bond repayments on various values assuming no deposit and that repayments are at prime:
| Bond value (20 years) | Old monthly cost (10.75%) | New monthly cost (11.25%) | Change |
|---|---|---|---|
| R750 000 | R7 614 | R7 869 | +R254 |
| R800 000 | R8 122 | R8 394 | +R272 |
| R850 000 | R8 629 | R8 919 | +R290 |
| R900 000 | R9 137 | R9 443 | +R306 |
| R950 000 | R9 645 | R9 968 | +R323 |
| R1 000 000 | R10 152 | R10 493 | +R341 |
| R1 500 000 | R15 228 | R15 739 | +R511 |
| R2 000 000 | R20 305 | R20 985 | +R680 |
| R2 500 000 | R25 381 | R26 231 | +R850 |
| R3 000 000 | R30 457 | R31 478 | +R1021 |
| R3 500 000 | R35 533 | R36 724 | +R1191 |
| R4 000 000 | R40 609 | R41 970 | +R1361 |
| R4 500 000 | R45 685 | R47 217 | +R1532 |
| R5 000 000 | R50 761 | R52 463 | +R1702 |