If you’ve been keeping an eye on borrowing costs, here’s some good news: the South African Reserve Bank just decided to lower the key interest rate again.
On Thursday, the Monetary Policy Committee (or MPC for short) voted to cut the repo rate by 25 basis points.
That might sound technical, but it means borrowing money just got a little cheaper.
What Exactly Happened With the Rate Cut
The decision wasn’t unanimous but pretty close — five out of six MPC members supported the 0.25% (that’s the 25 basis points) cut.
One member thought it should go down even more, suggesting a 50 basis point reduction instead.
As it stands now, the repo rate is 7.25%, which means banks can borrow money from the Reserve Bank at that rate.
This also influences the prime lending rate — the interest banks charge their best customers — which is now 10.75%.
Who Makes These Important Rate Decisions?
You might be wondering who these committee members are and how often they meet.
The Monetary Policy Committee is a group of six experts who get together every two months to decide if interest rates should move up, down, or stay put.
In 2025, they’ve scheduled meetings in January, March, May, July, September, and November — always on a Thursday at 3 pm.
Lesetja Kganyago, the governor of the South African Reserve Bank, leads the committee and has the final say if votes are tied.
Looking Back and Ahead at Rate Changes in 2025
Just to give you some context on how things have shifted this year: the committee started off by cutting rates by 25 basis points in January, then left them unchanged in March, and now again cut by 25 basis points at the end of May.
The next meetings will be in July, September, and November, so stay tuned.
What Does This Mean for Your Bond Repayments?
For anyone with a home loan, even a small rate cut can mean some noticeable savings.
Let’s break down what this rate cut means for monthly bond repayments on different loan amounts over 20 years, assuming you’re paying the prime rate and didn’t put down a deposit.
Here’s a quick snapshot:
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If you have a bond of R750,000, your old monthly repayment at 11% interest was R7,741. Now, with the new 10.75% rate, you’ll pay about R7,614 — saving you R127 a month.
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For a R1,000,000 bond, your repayment drops from R10,322 to R10,152, saving you R170 monthly.
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On a bigger loan of R5,000,000, repayments decrease from R51,609 to R50,761, which saves you a solid R848 every month.
Those monthly savings can add up, making a real difference for homeowners across the country.