Property

How much more you’ll pay on your bond after the latest interest rate hike in South Africa

Malcolm Libera

 ·28 May 2026

The South African Reserve Bank (SARB) has hiked the repo rate by 25 basis points, which property experts say will put further pressure on households already strained.

Following the latest Monetary Policy Committee meeting, the repo rate increased to 7.00%, while the prime lending rate climbed to 10.50%.

Four members of the committee voted in favour of the hike, while two voted to keep rates unchanged.

The decision comes as inflationary pressures remain elevated. Headline consumer inflation rose to 4.0% in April, driven largely by an 11% jump in fuel prices.

The central bank now expects headline inflation to average 4.4% in 2026 and 3.7% in 2027 before eventually returning to the 3% target.

However, it warned that risks remain, particularly due to higher oil prices and the knock-on effects on food, transport, and fertiliser costs.

Property industry leaders said the latest increase could undermine already fragile consumer confidence and further weaken the housing market.

Samuel Seeff, chairman of the Seeff Property Group, described the move as premature and a blow to the economy and property market.

He added that South Africans were already struggling with the combined burden of high interest rates, fuel price increases, and rising living costs, leaving households with less disposable income.

According to Seeff, the property market has already started losing momentum after expectations of a January rate hike failed to materialise earlier this year.

Andrew Golding, chief executive of the Pam Golding Property Group, said banks were still showing strong support for the residential market despite the challenging environment.

“Banks are working hard to offset deteriorating affordability by offering more zero-deposit home loans and cost-inclusive bonds,” said Golding.

He noted that the real concern would arise only if banks began tightening credit due to fears of unsustainable household debt levels, for which there is currently little evidence.

Golding warned that higher interest rates would place added pressure on lower- and middle-income households, making affordability increasingly important for prospective buyers.

BetterBond’s national head of sales, Bradd Bendall, struck a more optimistic tone, saying the housing market remained resilient despite the rate increase.

“This interest rate hike may not be ideal, but the property market is in a strong enough position to absorb the impact,” said Bendall.

While affordability pressures remain, particularly for first-time buyers, Bendall said demand in sought-after areas continues to hold firm.

“The fundamentals of South Africa’s housing market remain solid, and buyers who plan carefully can still afford an opportunity in the current market,” he said.

Extra cost on your bond

Along with the optimism shown by the property experts, the 25bps provides tangible relief of at least R142 at the lower end.

A 25-basis-point increase translates to an extra monthly cost of R168 on a R1 million bond and R335 on a R2 million bond.

The latest oobarometer report highlighted that the average home price in South Africa has climbed to R1,695,257. This means the 0.25% hike in interest rates will have a notable impact on homeowners.

For the average South African home priced at R1.695 million, the monthly repayment increases by R284, adding more financial pressure to households.

The extra costs on bonds for property prices between R850,000 and R5 million can be found below: