SA Reserve Bank Increase Prime Lending Rate To 10.5% - Repo Rate - 7%

Yesterday the SARB announced yet a further increase in the lending rate by 75 basis points. This means that the repo rate (the rate at which the Reserve Bank lends money to commercial banks) will increase from 6.25% to 7%, which in turn pushes the prime rate (the basic rate at which commercial banks provides financing to borrowers) up from 9.75% to 10.5%.

What does this mean for homeowners who owe on their bonds? The repayment amount on a R1 million bond over 20 years will now increase by R499 per month - from R9 485 up to R9 984.

For one's personal finances, the higher interest rates translate to higher debt repayments, whether in respect of a mortgage, vehicle financing, student loan or other debt.