What does the recent Interest rates cut mean to the property market in Real terms
How much you save on a R1 million bond after the interest rate cut
The Monetary Policy Committee of the SA Reserve Bank has announced it will cut the repo rate by 25bps from 6.75% to 6.50%.
The base home loan rate has dropped from 10.25% to 10%, with the property sector praising the decision as it is likely to have a direct positive knock-on effect for homeowners.
Specifically, Rhys Dyer, CEO of South Africa’s biggest bond originator Ooba, said that the lower rate will stimulate the residential housing market, as prospective homebuyers will now find it easier to afford the repayments on a new home loan.
“The current South African property market outlook remains cautiously favourable with moderate house price growth, relatively low interest rates and an increased appetite from the major lenders to lend,” he said.
Ooba calculated that on a R1 million home loan, this Reserve Bank decision will save South African home owners approximately R39,900 over a 20 year term.
This means that the home buyer will be saving approximately R166 on their monthly bond repayments, it said.
29 Mar 2018
Author Business Tech Staff writer