{"id":571178,"date":"2022-03-24T17:00:33","date_gmt":"2022-03-24T15:00:33","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=571178"},"modified":"2022-03-24T17:00:33","modified_gmt":"2022-03-24T15:00:33","slug":"how-much-more-you-will-pay-on-your-bond-after-south-africas-latest-interest-rate-hike-2","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/571178\/how-much-more-you-will-pay-on-your-bond-after-south-africas-latest-interest-rate-hike-2\/","title":{"rendered":"How much more you will pay on your bond after South Africa’s latest interest rate hike"},"content":{"rendered":"

The interest rate hike announced by the Reserve Bank on Thursday (24 January) means homeowners will be paying extra on their monthly bonds in South Africa.<\/p>\n

While the rate hike was largely expected, the central bank still faces a particularly delicate balancing act, said Dr Andrew Golding, chief executive of the Pam Golding Property group.<\/p>\n

“By increasing the repo rate by a moderate 25bps for the third consecutive MPC meeting, the SA Reserve Bank is endeavouring to normalise interest rates \u2013 in line with their stated strategy – amidst a resurgence in inflationary pressures and a tepid economic growth outlook.<\/p>\n

“While an unchanged repo rate would have been preferred, this moderate approach has in all likelihood already been factored in by the housing market.”<\/p>\n

Attempting to tighten monetary policy to dampen price pressures but not derail the economic recovery was already challenging, but now the war in Ukraine has brought further uncertainty and financial market turmoil, he said.<\/p>\n

According to the Pam Golding Residential Property Index, price growth has now peaked in all major regional markets, with the Western Cape recording the strongest growth rate of +6.3% in February 2022, followed by +5.4% in KwaZulu-Natal and +4.2% in Gauteng.<\/p>\n

This compares with a gradual slowdown in national house price inflation which eased from a mid-2021 peak of 5.89% to 4.5% in February 2022. It is estimated that after averaging 5.6% last year, national house prices are likely to increase by 3-4% in 2022.<\/p>\n

\"\"<\/a><\/p>\n

Given the hike, the table below outlines what South Africans will now be paying on their monthly bonds, based on a 20-year loan.<\/p>\n

\n
\n\n\n\n\n\n\n
Value of the bond<\/th>\nOld monthly cost<\/th>\nNew monthly cost<\/th>\nChange<\/th>\n<\/tr>\n
R1 000 000<\/td>\nR8 056<\/td>\nR8 209<\/strong><\/td>\n+R153<\/td>\n<\/tr>\n
R1 500 000<\/td>\nR12 084<\/td>\nR12 314<\/strong><\/td>\n+R230<\/td>\n<\/tr>\n
R2 000 000<\/td>\nR16 112<\/td>\nR16 419<\/strong><\/td>\n+R307<\/td>\n<\/tr>\n
R2 500 000<\/td>\nR20 140<\/td>\nR20 524<\/strong><\/td>\n+R384<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

While the market is taking the hikes in its stride and continues to see strong activity, it is no doubt beginning to pinch and households and homebuyers need to adjust, said Samuel Seeff, chairman of the Seeff Property Group.<\/p>\n

At 7.75%, the interest rate is still well below the 10% level of early 2020 before we entered the pandemic. It is generally still cheaper to buy than rent, said Seeff.<\/p>\n

“The interest rate remains an inducement for buyers who can still find favourable bank lending conditions. Mortgage originator, ooba, notes that qualifying buyers can still find higher loan to value mortgages while first-time buyers are still able to secure 100% bonds, with costs in some instances.”<\/p>\n

While there are stock shortages in certain areas, the market remains well-balanced. Seeff said while it is a good time to sell, asking prices are coming under pressure, especially in the higher price bands. FNB has also pointed to a slowing in house price appreciation to around 3.8% (from last year\u2019s 4.1%).<\/p>\n

\n

Read: Here are the new rental and property rules proposed for South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The interest rate hike announced by the Reserve Bank on Thursday (24 January) means homeowners will be paying extra on their monthly bonds in South Africa.<\/p>\n","protected":false},"author":10,"featured_media":126067,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[26,10618,10773],"class_list":["post-571178","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-headline","tag-pam-golding","tag-seeff"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/571178","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=571178"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/571178\/revisions"}],"predecessor-version":[{"id":571236,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/571178\/revisions\/571236"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/126067"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=571178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=571178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=571178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}