Good News for Homeowners and Buyers – Prime Lending Rate now 10.25%

This afternoon, the Monetary Policy Committee of the South African Reserve Bank (‘SARB’) convened its sixth and final meeting of 2025. In another win for the property industry, and as widely anticipated by key economists and various financial institutions, SARB has elected to unanimously lower the repo rate to 6.75%, effective today, 20th November 2025. Correspondingly, the prime lending rate is now 10.25%.

Marking this year’s fourth interest rate cut of 0.25%, the decision was made in light of concerted fiscal reforms and delivered against the backdrop of two recent major announcements: S&P Global’s decision to upgrade South Africa’s foreign currency sovereign credit rating and, most significantly, the formal adoption of a new inflation target. Following SARB’s ongoing campaign to lower the inflation target, last week’s 2025 Medium-Term Budget Policy Statement included an adjusted 3% inflation target, which is supported by a 1% tolerance band to ameliorate any immediate economic volatility. A lower, more precise target aligns the country’s inflation-targeting framework with global best practice and gives SARB stronger grounds to keep inflation predictable and contained. Importantly, the move paves the way for sustained repo rate cuts, with lower inflation expectations typically translating into reduced borrowing costs and improved mortgage bond affordability – particularly for first-time purchasers.

As market analysts estimated that a repo rate change would be contingent on the formal adjustment of the inflation target, SARB’s decision is thus unsurprising. No doubt welcomed by homeowners with bond repayments, prospective purchasers, and the broader property industry, the cut supports household spending, improves bond affordability, and is likely to stimulate demand for South African real estate heading into 2026.

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