The South African Reserve Bank (SARB) has decided to maintain its repo rate at 7.0%, keeping the prime lending rate steady at 10.5%. This decision offers some relief to homeowners with variable-rate mortgages, sparing them from an increase in monthly payments. At the existing prime rate, monthly repayments for a R2 million home loan over 20 years remain at R19,968. Had the SARB opted for a 25-basis-point rate hike, borrowers would have faced an additional R335 in monthly repayments.
For homeowners with such loans, the SARB’s decision means that over the entire 20-year term, they will repay around R4.79 million. This figure includes both the principal loan amount and the interest charges. Maintaining the current rates provides financial stability for borrowers, allowing them to plan their expenses without the burden of increased repayment costs.
The decision by the Monetary Policy Committee was not unanimous, however. Out of its members, four voted to keep rates unchanged, while two members argued in favor of a 25-basis-point increase, citing concerns over inflation. The divided opinions reflect ongoing debates about balancing economic growth with inflation control.
The SARB’s next interest rate meeting is scheduled for 23 September 2026, where further assessments of the economic landscape and inflation trends will determine future rate adjustments. Until then, homeowners with variable-rate mortgages can continue to benefit from the current rate stability. This decision underscores the SARB’s cautious approach in navigating complex economic conditions.