On 19 September 2024, The South African Reserve Bank (The SARB)'s Monetary Policy Committee (MPC) rate decision was to cut the repo rate by 25 basis points.
Watch the video below.
Repo rate meaning
The repo rate is short for the repurchase rate and refers to the rate at which The Reserve Bank lends money to banks in South Africa.
What is the current repo rate?
The current repo rate is at 8.00%, with the prime lending rate at 11.50%.
Does repo rate affect home loan?
Yes, the repo rate has a direct effect on your home loan. This is because it has a direct impact on the prime lending rate. The prime lending rate is the basic rate banks charge on loans. This means that when the repo rate increases, the prime lending rate increases too. When these interest rates increase, your monthly premium increases too. This will affect not only your home loan, but your car loan too.
What happens when repo rate increases?
As was mentioned above, when the repo rate increases, the prime lending rate increases and as a result, your home loan's monthly premium as well as your car loan premium increases too.
What causes the change in the repo rate?
The SARB's Monetary Policy Committee (MPC) changes the repo rate so that it can keep the inflation rate under control. As it stands, The SARB is aiming to keep inflation target range between 3%-6%.
Inflation, very broadly, is the increase of the price of goods and services. If you combine an increase in inflation, an increase with interest rates, an increase of the cost of electricity as well as stagnant salaries, it's no wonder that South Africans are struggling to make ends meet.
Did you know: middle-class South Africans are spending nearly 80% of their salary towards financing debt.
What can you do if you can't manage with your loan repayments and the increase of cost of living?
Go under debt review, also known as debt counselling, at Meerkat. Debt counselling helps South Africans get on top of their debt repayments again. This is accomplished by consolidating all your debt into one, usually reduced monthly repayment.
Did you know: clients at Meerkat can save up to 50% on their monthly debt repayment!
We do this by negotiating with your creditors to reduce the interest rate on your loans.
And, did you know: these new reduced interest rates are FIXED throughout your time in debt review. That means you will be unaffected by any future rate decisions.
Secure your future and see if we can save you on your monthly debt instalments! Let us contact you about debt review now.
Want to know more about the debt counselling process? Read this blog post.
Who is Meerkat?
Meerkat is a registered financial services provider committed to empowering South Africans do MORE with their money. They do this by helping people:
- Get out of debt.
- Get affordable funeral cover that really covers the cost of funerals in South Africa.
- Get credit life cover for when the unexpected happens.
- Build an emergency savings fund to ensure you stay out of debt!