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. 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 […]
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.
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 000 | R7 869 | R8 128 | +R259 |
| R800 000 | R8 394 | R8 670 | +R276 |
| R850 000 | R8 919 | R9 212 | +R293 |
| R900 000 | R9 443 | R9 753 | +R310 |
| R950 000 | R9 968 | R10 295 | +R327 |
| R1 000 000 | R10 493 | R10 837 | +R344 |
| R1 500 000 | R15 739 | R16 256 | +R517 |
| R2 000 000 | R20 985 | R21 674 | +R689 |
| R2 500 000 | R26 231 | R27 093 | +R862 |
| R3 000 000 | R31 478 | R32 511 | +R1 032 |
| R3 500 000 | R36 724 | R37 930 | +R1 206 |
| R4 000 000 | R41 970 | R43 348 | +R1 378 |
| R4 500 000 | R47 217 | R48 767 | +R1 550 |
| R5 000 000 | R52 463 | R54 185 | +R1 722 |
READ MORE: Interest rate: R5 million bond, no deposit now costs R54 185 per month!