The South African Reserve Bank kept the repo rate at 7.00% on 18 September, leaving prime at 10.50%. This decision has implications for interest rates in South Africa. Property industry leaders called it a missed chance to ease pressure on bondholders. The bank framed the pause as caution while it assesses earlier cuts. Additionally, it considers longer-term inflation risks near its preferred 3% anchor.
Budget Wisely and Keep Repayments Steady
Ahead of the decision, BetterBond urged homeowners to avoid extra debt. If possible, they should keep paying their bonds at current levels even if rates fall. The lender says application volumes rose 11% quarter-on-quarter and 14% year-on-year. First-time buyers’ average purchase price is about R1.3 million, and average deposits are down 5%. In the context of interest rates in South Africa, a rate drop would make a R2 million bond cost just over R2 000 less per month than at the May 2023 peak.
Arrears Show Why Action Matters
However, arrears are rising. Sentinel Homes’ Renier Kriek told Daily Investor the share of up-to-date mortgage accounts fell from roughly 92% to 88% by late 2023. This means a sharp increase in accounts behind on payments. In light of the prevailing interest rates in South Africa, he urged distressed owners to negotiate early with banks and pay what they can. Moreover, they should consider selling if their situation won’t improve soon.
What This Means for You
For now, interest rates in South Africa remain unchanged—so plan for a longer grind. Industry voices still see room for cuts later, but they’re not guaranteed. In this environment, build a buffer and keep repayments a notch higher if you can. Talk to your lender at the first sign of trouble. That way, you reduce risk while staying ready if interest rates in South Africa finally ease again.
