The South African Reserve Bank (SARB) has decided to maintain its repo rate at 7.0%, keeping the prime lending rate steady at 10.5%. This decision offers some respite to homeowners with variable-rate mortgages, who were spared from a potential increase in monthly repayments. If the rate had risen by 25 basis points, borrowers could have seen an estimated R335 increase in their monthly payments.
For those with a R2 million home loan spanning 20 years, the unchanged prime rate results in a monthly repayment of R19,968. Over the entire duration of the loan, homeowners are expected to pay approximately R4.79 million, which includes both the principal and interest.
The decision to hold rates was not unanimous within the Monetary Policy Committee. Four members voted in favor of maintaining the current rates, while two members pushed for a 25-basis-point increase, citing worries over inflation as a primary concern. This division highlights ongoing debates about the best approach to managing inflationary pressures while supporting economic stability.
The SARB’s next interest rate announcement is slated for 23 September 2026, leaving room for further discussions and potential adjustments depending on the economic landscape at that time. The decision to keep rates unchanged will likely be reassessed during that meeting, as the committee continues to monitor economic indicators and inflation trends.