BAD news for anyone with a BOND in South Africa

South Africans with variable-rate home loans are facing higher monthly repayments after the South African Reserve Bank (SARB) raised interest rates by 25 basis points.

Following Wednesday’s Monetary Policy Committee (MPC) meeting, the repo rate increased to 7.25%, while the prime lending rate rose to 10.75%.

For homeowners, the increase means another hit to already stretched household budgets.

What it means for the average South African home

Using the latest average South African house price of R1 695 257, a 20-year home loan at prime now requires an estimated monthly repayment of R17 211.

Before the latest rate increase, the repayment was around R16 925.

That means the latest hike adds approximately:

• R286 per month
• R3 432 per year
• About R68 640 over 20 years, if the rate remained unchanged and the additional amount were maintained throughout the loan.

The calculations assume a 20-year repayment period and a home loan priced at prime. Actual repayments will vary depending on individual loan terms, deposits and interest rates.

Considering banks generally limit bond repayments to 30% of your gross monthly salary, a single person buying an average house of R1 695 257 with no deposit and monthly installments of R17 211, would need to earn a salary of R57 370 per month.

The bigger picture

The 25-basis-point increase takes the prime lending rate from 10.50% to 10.75%.

While a R286 monthly increase may appear relatively small, the impact can be significant for households already dealing with higher food, fuel, electricity and other living costs.

The latest increase was also not expected to be driven by an overheating property market or excessive domestic demand.

Instead, renewed fuel-price and inflation pressures have become a major concern for the SARB.

Governor Lesetja Kganyago warned that global economic vulnerabilities are increasing following the energy shocks of 2026.

South Africa’s economy contracted by 0.2% in the second quarter, highlighting the difficult environment facing households and businesses.

What happens next?

The SARB’s next Monetary Policy Committee meeting is scheduled for Thursday, 19 November 2026 and will be the final interest-rate decision of the year.

Will there be another pre-Christmas shock to the wallet? Watch this space …

Other bond repayment examples

At the new prime lending rate of 10.75%, monthly repayments over 20 years are:

Bond	Old	New	Change
R1 million	R9 984	R10 152	R168
R1.5 million	R14 976	R15 228	R252
R1 695 257	R16 925	R17 211	R286
R2 million	R19 968	R20 305	R337
R2.5 million	R24 960	R25 381	R421
R3 million	R29 951	R30 457	R506

Dates and outcomes of SARB MPC meetings in 2026

Month	Date	Outcome
January	29 January	No change
March	26 March	No change
May	28 May	25 bps hike
July	23 July	No change
September	23 September	25 bps hike
November	19 November	TBA