Interest rate hike: How much MORE you will now pay on a R1 million bond [table]

Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, has hiked the repo rate by another 75 basis points.

Sep 22, 2022 - 17:43
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Interest rate hike: How much MORE you will now pay on a R1 million bond [table]

Governor of the SA Reserve Bank, Lesetja Kganyago, on Thursday hiked the repo rate by another 75 basis points in yet another blow to the wallets of suffering South Africans.

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The latest move brings the repo rate to 6.25% and the prime lending rate to 9.75%.

Three (of the five) members of the monetary policy committee supported the increase, while two favoured a 100 basis points hike.

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The hike is the second consecutive upward rate adjustment of 75 basis points.

“The level of the repurchase rate is now closer to the level prevailing before the start of the pandemic,” Kganyago said.

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Rates are now at the same levels as January 2020, before hard lockdowns hit the economy.

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What does the latest increase mean for those with monthly bond repayments to pay?

On a home loan of R1 million at the prime rate (9.75%), the latest hike will increase payments by R488 a month, while a R2 million bond outstanding with now cost R975 more each month.

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The table below shows both ‘old’ and ‘new’ monthly bond repayments on various outstanding bond values (assuming your repayments are at prime):

Bond value (20 years)Old monthly cost (9%)New monthly cost (9.75%)Change
R750 000R6 748R7 113+R365
R800 000R7 198R7 588+R390
R850 000R7 648R8 062+R414
R900 000R8 098R8 536+R438
R950 000R8 547R9 010+R463
R1 000 000R8 997R9 485+R488
R1 500 000R13 496R14 227+R731
R2 000 000R17 995R18 970+R975
R2 500 000R22 493R23 712+R1 219
R3 000 000R26 992R28 455+R1 463
R3 500 000R31 490R33 198+R1 708
R4 000 000R35 989R37 940+R1 951
R4 500 000R40 488R42 683+R2 195
R5 000 000R44 986R47 425+R2 439