Home Loan Interest Rates 2024
Good news for homebuyers as September 2023 saw the SARB opt to leave the interest rate unchanged, indicating that recent hikes may be coming to an end.
The interest rate on a home loan will vary depending on what the bank is willing to offer, and how much of a risk they consider you to be.
But aside from your financial situation, a significant factor affecting interest rates is the repo rate, which is determined by the South African Reserve Bank. The repo rate refers to the rate at which the SARB will lend to commercial banks.
The repo rate in turn determines the prime lending rate, which is the repo rate plus what the banks add on to make a profit.
What is the current prime lending rate?
As of February 2024, the interest rate is 11.75%.
The past couple of years saw several rate hikes as the South African Reserve Bank sought to combat inflation.
But experts predict that the hikes are at an end and may even begin to reverse.
This prediction seems likely to be correct as September 2023 saw the SARB to forego any interest rate hikes, keeping the rate at its current 11.75%.
Other factors that affect interest rates
As well as the prime interest rate, your financial situation will affect the interest rate that the bank charges on your home loan.
Your credit record
The most significant factor is your credit record, which is affected by things such as your level of debt, and how timeously you pay your bills.
You need a minimum credit record of 610+ to have a chance of home loan approval.
Anything above 670 is considered an excellent credit score, and is likely to earn you lower interest rates.
Your deposit
The size of your deposit will also affect your interest rates. The higher the deposit, the less risk to the bank, and therefore lower monthly repayments and interest rates
