Economists and property experts have been predicting an interest rate hike of 0.5% this month, but there is a chance it could actually be 0.75%.
By the end of January 2023, the interest rate could reach 11%, says Nondumiso Ncapai, managing executive at Absa Home Loans.
“We forecast further hikes of 75bp by the South African Reserve Bank (SARB) this month and 50bp in January, taking the repo rate to 7.50%.”
Whatever the repo rate is, the prime lending rate of the banks is 3.5% higher.
Ncapai says the average price of a house is around R1.25m, and using this price and a loan term of 20 years as a basis, a 0.75% increase in the interest rate will result in an increase of about R620 in your bond.
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