ooba says interest rate cut will help - but a lot more needed

ooba says interest rate cut will help - but a lot more needed

ooba (formerly MortgageSA) welcomed the 0.5% interest rate cut announced yesterday by the South African Reserve Bank which will save South African home owners an estimated R259m in home loan repayments each month, but says more cuts are needed.

"The decision by the Reserve Bank to cut interest rates by 0.5% is a relief to all property owners but further cuts are necessary in order to revive the ailing property market," says Saul Geffen, chief executive of ooba (formerly MortgageSA).

Interest rates have been increased by 5% since June 2006 which means that an average bond at prime of R1 million is R3 560 more expensive to pay off each month.

The high price of debt is one of the major causes of property owners defaulting on their bond repayments.

"Property is fundamental to wealth creation and is many South African's primary investment," states Geffen. "This cut will provide much needed relief to homeowners struggling with debt repayments and hopefully we will now see a decline in the numbers of defaults."

The decrease in the price of debt coupled with the recent cuts in petrol price will bring a welcome respite to all consumers who have been struggling with the high cost of living.

While the rate cut may not make a substantial difference in property owner's repayments it will go a long way to restore consumer confidence and kick-start the property industry.

"This move signals the beginning of a downward trend in rates and will go a long way to restoring positive sentiment .We can look forward to further interest rate cuts in 2009," says Geffen.

Savings

Bond of R350,000 - R130 per month saving with 0.5% interest rate cut

Bond of R500,000 - R185 per month saving with 0.5% interest rate cut

Bond of R1,000,000 - R370 per month saving with 0.5% interest rate cut

Hello ooba news

ooba (formerly MortgageSA) welcomed the 0.5% interest rate cut announced yesterday by the South African Reserve Bank which will save South African home owners an estimated R259m in home loan repayments each month, but says more cuts are needed.

According to a new poll by South Africa's leading property listings website, nearly a third of home hunters decide that a property is right for them before they even enter the house - and a kitchen is overwhelmingly the most important room when it comes to the buying decision.

Propertygenie.co.za has entered into a partnership with fractionalownership.co.za to provide access to the latest fractional ownership listings which will be available from the 12 December, 2008.

South Africans spent over R10 billion during the festive season last year. This year ooba suggests carefully planning your holiday season spending to avoid a financial hangover in January 2009. "Festive season debt can take months to pay off in the new year," says Jenny Rushin, Provincial Sales Manager for ooba (formerly MortgageSA).

Weak economic conditions, higher interest rates and the global credit crisis have forced banks to be far more picky about who they will lend money and less generous with their lending rates. But Mary Jane Lefevre, Regional Sales Manager of ooba, said that before you apply for a home loan, there are steps you can take to improve your credit status and encourage lenders to look more favourably on your application.