If you’ve been watching your budget closely or thinking about buying a home, the South African Reserve Bank’s recent interest rate decision could be good news for you.
On Thursday, the bank’s Monetary Policy Committee (MPC) decided to lower the repo rate by 25 basis points.
That means borrowing costs just got a little cheaper, and it could have a positive effect on everything from your home loan repayments to general spending.
The Details Behind the Rate Cut
Out of the six MPC members who voted, five supported a 25 basis point reduction, while one wanted to push for a bigger cut of 50 basis points.
After the vote, the repo rate now sits at 7.25%, and the prime lending rate — the rate banks charge their best customers — dropped to 10.75%.
This shift might seem small, but it can add up to noticeable savings for borrowers.
Who Exactly Is On The SARB Monetary Policy Committee?
For those curious about how these decisions get made, the Monetary Policy Committee is the team at SARB responsible for steering South Africa’s interest rates.
They meet every two months—six times a year—to review economic conditions and decide whether to keep rates steady or adjust them.
Meetings are scheduled on Thursdays at 3 pm, and the current team consists of six members led by Lesetja Kganyago, the SARB governor, who holds the final say when votes are tied.
How Interest Rate Changes Affect Your Bond Repayments
Wondering how this rate cut affects your monthly bond repayments? Let’s break it down.
The table below compares the monthly payments for various bond amounts over 20 years, showing the difference between the old prime rate of 11% and the new rate of 10.75%.
Even though the difference might look small, it means real savings every month—sometimes hundreds of rand back in your pocket.
| Bond Amount | Old (11%) Monthly Payment | New (10.75%) Monthly Payment | Monthly Savings |
|---|---|---|---|
| R750,000 | R7,741 | R7,614 | R127 |
| R1,000,000 | R10,322 | R10,152 | R170 |
| R1,500,000 | R15,483 | R15,228 | R255 |
| R2,000,000 | R20,644 | R20,305 | R339 |
| R3,000,000 | R30,966 | R30,457 | R509 |
| R5,000,000 | R51,609 | R50,761 | R848 |
What’s Next for Interest Rates in 2025?
Looking ahead, the MPC will continue its bi-monthly meetings throughout the year with the next ones scheduled for July, September, and November.
So while this rate cut is a positive sign, the door remains open for further adjustments depending on how the economy evolves.