Interest Rate predictions for 2026 – what homebuyers need to know

Article summary:

• The SARB cut interest rates in November 2025, bringing the prime lending rate to 10.25%.
• Forecasts show the prime rate could potentially fall slightly further in 2026, depending on inflation, global conditions, and local growth.

Interest rates are one of the most important factors you need to research before applying for a home loan. They determine what you will pay, over and above the monthly repayments on your home loan.

Interest rates can fluctuate or remain stable throughout the year, depending on market conditions. Interest rate predictions can also indicate whether it’s a good time to enter the market.

The main factor affecting interest rates is the repo rate, which is set by the South African Reserve Bank. This determines the prime lending rate, which is the minimum banks will charge for loans. What they add to the prime lending rate, in your case, depends on your financial situation.

Fortunately, interest rate predictions look positive for 2026. Below is more information.

Note: Find out what you’ll likely pay in interest rates by having your financial situation assessed. You can do this by getting pre-approved with ooba Home Loans. We assess your financial situation and provide a solid estimate of what you can afford on your home loan.

Recent changes to the interest rate

Interest rates reached a record low during the pandemic as the SARB attempted to stimulate the market, but this was followed by a series of hikes over the next couple of years in an effort to combat inflation.

However, in 2023, experts predicted that the hikes would cease. This prediction followed September 2023 when the SARB opted to leave the interest rate (at the time 11.75%) untouched.

Experts then predicted interest rate cuts in late 2024. Investec chief economist Annabel Bishop based this on expectations for the US market and said in early 2024 that an interest rate cut in September 2024 is likely. 

A succession of cuts followed, with the most recent being in November 2025. As a result, the rate stands at 10.25% (as of January 2026).

Expert predictions for 2026

Forecasts for 2026 suggest a continuation of the slow, steady trend:

Investec anticipates (https://businesstech.co.za/news/business-opinion/847598/more-good-news-for-interest-rate-cuts-in-south-africa/) cuts in March and September 2026, lowering the repo rate to 6.25%. It also sees a further interest rate cut in March 2027.

Additional small cuts may occur if global inflation cools.

Market analysts caution that 2026 changes will depend on global interest-rate cycles, especially decisions by the US Federal Reserve.

Overall, 2026 is expected to feature either small cuts or stable rates, rather than sudden hikes.

In short: 2026 looks supportive for homebuyers, continuing the affordability improvements that began in late 2024.

What you could save on your home loan

Here’s what you could save on a home loan as a result of the November interest rate cut (assuming a 20-year term and 10% deposit).

Loan value	Monthly repayment at 11.75%	Monthly repayment at 10.25%	Monthly savings	3-year savings
R1 million	R9 753	R9 037	R822	R29 592
R2 million	R19 507	R18 074	R1 644	R59 184
R3 million	R29 260	R27 111	R2 466	R88 776
R4 million	R39 013	R36 148	R3 288	R118 368
R5 million	R48 767	R45 185	R4 110	R147 960

What about inflation?

The South African Reserve Bank (SARB) is targeting 3-6% inflation, with inflation at 3.5% as of November 2025. (https://tradingeconomics.com/south-africa/inflation-cpi)

Meanwhile, the Bureau for Economic Research (BER)’s more conservative survey forecasts point to inflation averaging around 4.2%–4.5% in 2026 across various social-group expectations, according to Engineering news.

Lower and stable inflation improves the possibility that the low-rates persist. That would mean favorable borrowing conditions beyond 2025, making 2026 another potentially good year for homebuyers.

Implication for homebuyers:

If inflation remains in the 3% – 4.5% range, and the central bank remains comfortable with price stability, then further interest-rate cuts (or at least no hikes) are plausible. That scenario would help keep monthly repayments and long-term borrowing costs more affordable, which is a strong incentive for buyers to lock in home loans now or early in 2026.

Get the best deal on your interest rates

ooba Home Loans is the best resource for achieving significant savings on your interest rates.

We submit your application to multiple banks. Lending criteria differs amongst banks, meaning that some may grant more favorable interest rates than others.

So apply with ooba Home Loans to get the lowest interest rates possible on your bond.

Find out what you can save by getting pre-approved

The most important factor banks assess when determining your interest rates is your credit record. This is a three-digit summation of your financial situation.

You can find out your credit record by getting pre-approved with ooba Home Loans. Pre-approval provides an estimate of what you’ll be able to afford on your home loan.

You can get pre-approved by contacting an expert at ooba Home Loans or by using our free, online pre-approval tool, the Bond Indicator.