The Reserve Bank has kept the repo rate unchanged at seven percent at its latest meeting, leaving the prime lending rate at 10.5%. For most South Africans with home loans, this is the number that matters, as banks usually set repayments at prime unless you have a discount.

What does this mean in practice? On a 20-year home loan, a small rate change has a clear effect. For every R100 000 borrowed, a 0.25% rate increase adds about R17 to the monthly repayment. For a R1 million bond, that is roughly R170. If the rate dropped by a full one percent, the saving would be about R660 a month on that same R1 million loan.

For households, the lesson is to plan for both possibilities. A simple way to prepare is to: “stress test” your budget by adding one or two extra percentage points to your mortgage rate to see if you could still manage. Paying a little extra each month into your bond also shortens the term and cushions you against future hikes.

The Reserve Bank has kept the door open for more cuts if conditions remain steady. Until then, households should treat today’s rates as a chance to build resilience rather than assume cheaper debt is guaranteed.

Quick Bond Calculator

Want to see how a rate change affects your bond? A rough rule of thumb:

• Every 0.25% change in interest shifts your repayment by about R17 per month for every R100 000 borrowed (on a 20-year bond).
• So if you owe R1 million, that same 0.25% shift adds or subtracts roughly R170 per month.
• A full one percent cut or hike changes repayments by about R660 per R1 million.

How to use it:
Take your bond size, divide by 100 000, then multiply by the R17 figure for each 0.25% change.

Example:
Bond of R750 000. If rates rise 0.25%= (750 000 ÷ 100 000) × R17 ≈ R128 extra a month.