Governor of the SA Reserve Bank, Lesetja Kganyago, on Thursday hiked the repo rate by another 75 basis points in yet a killer blow to the wallets of already suffering South Africans.
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The latest move, effective Friday, 25 November, brings the repo rate to 7% and the prime lending rate to 10.5%.
Three members of the committee preferred the announced rate, while the other two had opted for a 50 basis point hike.
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The hike is the third consecutive upward rate adjustment of 75 basis points.
“High inflation and weak economic growth continue to shape global conditions alongside monetary and fiscal policy responses. Russia’s war in Ukraine drags on, impairing trade and raising prices of a wide range of energy, food and other commodities,” Kganyago said.
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What does the latest increase mean for those with monthly bond repayments to pay?
On a home loan of R1 million at the prime rate (10.5%), the latest hike will increase payments by R499 a month, while a R2 million bond outstanding with now cost R998 more each month.
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The table below shows both ‘old’ and ‘new’ monthly bond repayments on various outstanding bond values (assuming your repayments are at prime):
|Bond value (20 years)||Old monthly cost (9.75%)||New monthly cost (10.5%)||Change|
|R750 000||R7 113||R7 488||+R375|
|R800 000||R7 588||R7 987||+R399|
|R850 000||R8 062||R8 486||+R424|
|R900 000||R8 536||R8 985||+R448|
|R950 000||R9 010||R9 485||+R474|
|R1 000 000||R9 485||R9 984||+R499|
|R1 500 000||R14 227||R14 976||+R748|
|R2 000 000||R18 970||R19 968||+R998|
|R2 500 000||R23 712||R24 960||+R1 247|
|R3 000 000||R28 455||R29 951||+R1 495|
|R3 500 000||R33 198||R34 943||+R1 745|
|R4 000 000||R37 940||R39 935||+R1 994|
|R4 500 000||R42 683||R44 927||+R2 244|
|R5 000 000||R47 425||R49 919||+R2 493|