SA Reserve Bank Cut Rates Another 100 Basis Points - Prime Rate Down To 7.75%
The SA Reserve Bank has cut the repo rate by 100 basis points, or one percentage point. This brings SA's repo rate to 4.25%.
How will this affect your pocket?
For first time and buyers in the affordable property market - and on a 𝐡𝐨𝐦𝐞 𝐥𝐨𝐚𝐧 𝐨𝐟 𝐑𝟕𝟎𝟎 𝟎𝟎𝟎, repayable at a prime interest rate of 8.75% over 20 years, your payment would have been
R6,185.97. It will now be R5 746.64 - 𝐬𝐢𝐠𝐧𝐢𝐟𝐲𝐢𝐧𝐠 𝐚 𝐫𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧 𝐨𝐟 𝐑𝟒𝟑𝟗.𝟑𝟑 𝐩𝐦.
On a 𝐡𝐨𝐦𝐞 𝐥𝐨𝐚𝐧 𝐨𝐟 𝐑𝟏 𝟎𝟎𝟎 𝟎𝟎𝟎, repayable at a prime interest rate of 8.75% over 20 years, your payment would have been R8,837.11. It will now be R8,209.49, 𝐬𝐢𝐠𝐧𝐢𝐟𝐲𝐢𝐧𝐠 𝐚 𝐫𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧 𝐨𝐟 𝐑𝟔𝟐𝟕.𝟔𝟐 𝐩𝐦.
On a 𝐡𝐨𝐦𝐞 𝐥𝐨𝐚𝐧 𝐨𝐟 𝐑𝟐 𝟎𝟎𝟎 𝟎𝟎𝟎, repayable at a prime interest rate of 8.75% over 20 years, your payment would have been R17 674.21. It will now be R16 418.97, 𝐬𝐢𝐠𝐧𝐢𝐟𝐲𝐢𝐧𝐠 𝐚 𝐫𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧 𝐨𝐟 𝐑𝟏 𝟐𝟓𝟓,𝟐𝟒 𝐩𝐦.
Tuesday's announcement was the second major cut in less than a month, after the central bank cut the rate by one percentage point in mid-March.
"The May 2020 meeting of the MPC was moved earlier and took place today [Tuesday]," the bank said in a tweet.
The repo rate is the benchmark interest rate at which the Reserve Bank lends money to other banks.
The unexpected cut cause the rand, which had been firming during the morning, to weaken from around R18.02/$ to around R18.17/$.
The bank's Monetary Policy Committee is set to host a media briefing via Zoom on Tuesday morning to explain the sudden cut.