{"id":792798,"date":"2024-09-30T15:00:38","date_gmt":"2024-09-30T13:00:38","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=792798"},"modified":"2024-09-30T15:00:43","modified_gmt":"2024-09-30T13:00:43","slug":"r303-per-month-saving-for-the-average-household-in-south-africa-with-more-relief-around-the-corner","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/792798\/r303-per-month-saving-for-the-average-household-in-south-africa-with-more-relief-around-the-corner\/","title":{"rendered":"R303 per month saving for the average household in South Africa – with more relief around the corner"},"content":{"rendered":"\n

The Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) has recently cut interest rates, reducing the country’s average mortgage and bond repayments by a combined R303 per month. <\/p>\n\n\n\n

The MPC cut interest rates earlier this month for the first time since 2020, which aligned with economists’ and analysts’ expectations.<\/p>\n\n\n\n

Reserve Bank governor Lesetja Kganyago said that the MPC reached a consensus of a 25 basis point cut, believing that a less restrictive stance was consistent with sustainably lower inflation expectations over the medium term. Inflation hit a three-year low of 4.4% in August. <\/p>\n\n\n\n

The repo rate now is 8.00%, and the prime lending rate is 11.50%.<\/p>\n\n\n\n

The rate cut follows similar moves from central banks worldwide. The US Fed also decided to cut interest rates by 50 basis points when it met a day before the MPC. <\/p>\n\n\n\n

South African assets have performed relatively well in recent months, strengthening the rand more than its peer emerging market economies. Meanwhile, long-term yields have moderated, and spreads over US rates have narrowed.<\/p>\n\n\n\n

Kganyago said that the Reserve Bank’s forecast shows rates moving towards neutral territory next year, stabilising slightly above 7%. This implies that another 75-100 basis point cuts are approaching for South Africa.<\/p>\n\n\n\n

In the meantime, South African households can expect a R303 cut in their debt repayments for their houses and cars. <\/p>\n\n\n\n

\n\n\n\n

Home loans <\/strong><\/p>\n\n\n\n

As every bond differs, we have decided to look at the possible savings that a 20-year bond with no deposit and a prime interest rate will receive following the latest cut.<\/p>\n\n\n\n

The latest data from ooba Home Loans showed that the average house in South Africa costs R1,458,924.<\/p>\n\n\n\n

With the price drop, the bond repayment for the average house dropped from R15,810 per month to R15,558 per month – a saving of R252 per month.<\/p>\n\n\n\n

The savings on bonds for properties prices between R750,000 and R5 million can be found below:<\/p>\n\n\n\n

Value of the bond (20 years)<\/th>Jul 2024 (11.75%)<\/th>Sep 2024 (11.50%)<\/strong><\/td>Change<\/strong><\/th><\/tr>
R750 000<\/td>R8 128<\/td>R7 998<\/td>-R130<\/mark><\/td><\/tr>
R800 000<\/td>R8 670<\/td>R8 531<\/td>-R139<\/mark><\/td><\/tr>
R850 000<\/td>R9 212<\/td>R9 065<\/td>-R147<\/mark><\/td><\/tr>
R900 000<\/td>R9 753<\/td>R9 598<\/td>-R155<\/mark><\/td><\/tr>
R950 000<\/td>R10 295<\/td>R10 131<\/td>-R164<\/mark><\/td><\/tr>
R1 000 000<\/td>R10 837<\/td>R10 664<\/td>-R173<\/mark><\/td><\/tr>
R1 458 924 (average)<\/em><\/strong><\/td>R15 810<\/em><\/strong><\/td>R15 558<\/em><\/strong><\/td>-R252<\/em><\/strong><\/mark><\/td><\/tr>
R1 500 000<\/td>R16 256<\/td>R15 996<\/td>-R260<\/mark><\/td><\/tr>
R2 000 000<\/td>R21 674<\/td>R21 329<\/td>-R345<\/mark><\/td><\/tr>
R2 500 000<\/td>R27 093<\/td>R26 661<\/td>-R432<\/mark><\/td><\/tr>
R3 000 000<\/td>R32 511<\/td>R31 993<\/td>-R518<\/mark><\/td><\/tr>
R3 500 000<\/td>R37 930<\/td>R37 325<\/td>-R605<\/mark><\/td><\/tr>
R4 000 000<\/td>R43 348<\/td>R42 657<\/td>-R691<\/mark><\/td><\/tr>
R4 500 000<\/td>R48 767<\/td>R47 989<\/td>-R778<\/mark><\/td><\/tr>
R5 000 000<\/td>R54 185<\/td>R53 321<\/td>-R864<\/mark><\/td><\/tr><\/tbody><\/table><\/div>
Using ooba’s calculator <\/a><\/strong><\/figcaption><\/figure>\n\n\n\n

Car Loans <\/strong><\/p>\n\n\n\n

Like home loans, the terms of a car loan depend on several factors, so we have looked at the value of a loan with no deposit or trade-in and a prime-linked interest rate over a 60-month term.<\/p>\n\n\n\n

WesBank said the average amount for a new vehicle it finances was approximately R410,000. <\/p>\n\n\n\n

With the latest cut in interest rates, the average South African car purchaser would thus save R51 monthly on car repayments.<\/p>\n\n\n\n

The savings on vehicles following the latest interest rate decrease can be seen below:<\/p>\n\n\n\n

Value of the car<\/th>July Rate (11.75%)<\/th>Sep Rate (11.50%)<\/th>Change<\/th><\/tr><\/thead>
R175 000<\/td>R3 966<\/td>R3 944<\/td>-R22<\/mark><\/td><\/tr>
R200 000<\/td>R4 519<\/td>R4 494<\/td>-R25<\/mark><\/td><\/tr>
R225 000<\/td>R5 072<\/td>R5 043<\/td>-R29<\/mark><\/td><\/tr>
R250 000<\/td>R5 625<\/td>R5 593<\/td>-R32<\/mark><\/td><\/tr>
R275 000<\/td>R6 178<\/td>R6 143<\/td>-R35<\/mark><\/td><\/tr>
R300 000<\/td>R6 731<\/td>R6 693<\/td>-R38<\/mark><\/td><\/tr>
R350 000<\/td>R7 837<\/td>R7 793<\/td>-R44<\/mark><\/td><\/tr>
R400 000<\/td>R8 943<\/td>R8 893<\/td>-R50<\/mark><\/td><\/tr>
R410 000 (Average)<\/em><\/strong><\/td>R9 164<\/em><\/strong><\/td>R9 113<\/em><\/strong><\/td>-R51<\/em><\/mark><\/strong><\/td><\/tr>
R450 000<\/td>R10 049<\/td>R9 992<\/td>-R57<\/mark><\/td><\/tr>
R500 000<\/td>R11 155<\/td>R11 092<\/td>-R63<\/mark><\/td><\/tr>
R550 000<\/td>R12 261<\/td>R12 191<\/td>-R70<\/mark><\/td><\/tr>
R600 000<\/td>R13 367<\/td>R13 291<\/td>-R76<\/mark><\/td><\/tr>
R650 000<\/td>R14 473<\/td>R14 391<\/td>-R82<\/mark><\/td><\/tr>
R700 000<\/td>R15 579<\/td>R15 490<\/td>-R89<\/mark><\/td><\/tr>
R750 000<\/td>R16 684<\/td>R16 590<\/td>-R94<\/mark><\/td><\/tr>
R800 000<\/td>R17 790<\/td>R17 689<\/td>-R101<\/mark><\/td><\/tr>
R850 000<\/td>R18 896<\/td>R18 789<\/td>-R107<\/mark><\/td><\/tr>
R900 000<\/td>R20 002<\/td>R19 888<\/td>-R114<\/mark><\/td><\/tr>
R950 000<\/td>R21 108<\/td>R20 988<\/td>-R120<\/mark><\/td><\/tr>
R1 000 000<\/td>R22 214<\/td>R22 088<\/td>-R126<\/mark><\/td><\/tr><\/tbody><\/table><\/div>
Using Wesbank Finance Calculator<\/a><\/figcaption><\/figure>\n\n\n\n
\n\n\n\n

Read<\/strong>: Big companies closing down in South Africa \u2013 but some buyers see a bargain<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The South African Reserve Bank recently cut interest rates, bringing relief to South Africans in debt. <\/p>\n","protected":false},"author":95,"featured_media":684731,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26,5829,3619,6619],"class_list":["post-792798","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline","tag-ooba","tag-sarb","tag-wesbank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/792798","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=792798"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/792798\/revisions"}],"predecessor-version":[{"id":792978,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/792798\/revisions\/792978"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/684731"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=792798"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=792798"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=792798"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}