Those wishing to break into the property market – and those with existing bonds – face tough times in South Africa.
In an ideal world, no one wishes to help pay off someone else’s bond, but renting will continue to remain the only option for many after the South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) elected to keep interest rates on hold after meeting on Wednesday, 27 March.
The MPC meets every second month.
The latest MPC decision means the repo rate will remain at 8.25% while the current prime lending rate stays at 11.75%.
It was the fifth consecutive meeting that the rates have remained on hold.
It also means that South Africans will continue to service their repayments at rates at 15-year highs.
Some possible good news could lie ahead in May – or July – perhaps when a cut is on the cards, but not guaranteed.
Reserve Bank governor Lesetja Kganyago confirmed that the latest vote was unanimous among the five-member committee.
The five-person committee will expand to six when Mampho Modise takes over as Deputy Governor next week.
Kganyago recently told Bloomberg that the SARB won’t succumb to election pressures as the country prepares to vote in the general elections on Wednesday, 29 May 2024.
REMAINING SARB MPC MEETING DATES FOR 2024
| Month | Date |
| May | 30 May |
| July | 18 July |
| September | 19 September |
| November | 21 November |
Reminder of monthly bond repayments
The table below shows the current monthly bond repayments on various bond values assuming no deposit and that repayments are at prime (11.75%) compared to the situation three years ago when the prime lending rate stood at 7%.
A relatively modest (by today’s standards) R2.5 million bond now costs R7 711 more every month. Ouch.
| Bond value (20 years) | Monthly cost | Cost in 2021 |
| R750 000 | R8 128 | R5 815 |
| R800 000 | R8 670 | R6 202 |
| R850 000 | R9 212 | R6 590 |
| R900 000 | R9 753 | R6 978 |
| R950 000 | R10 295 | R7 365 |
| R1 000 000 | R10 837 | R7 753 |
| R1 500 000 | R16 256 | R11 629 |
| R2 000 000 | R21 674 | R15 506 |
| R2 500 000 | R27 093 | R19 382 |
| R3 000 000 | R32 511 | R23 259 |
| R3 500 000 | R37 930 | R27 135 |
| R4 000 000 | R43 348 | R31 012 |
| R4 500 000 | R48 767 | R34 888 |
| R5 000 000 | R54 185 | R38 765 |
