The current prime lending rate in South Africa

Article summary

• The current prime lending rate is 11.75%
• This follows a series of interest rate hikes as the South African Reserve Bank attempts to combat inflation.
• Experts believe the interest rate hikes may be coming to an end.

The current prime lending rate is 11.75%, based on a repo rate of 8.25% as determined by the South African Reserve Bank.

Use our Bond Calculator to determine how this will affect the cost of your home loan.

Will the interest rate increase?

The prime lending rate was increased by 0.50 in March 2023, which was the latest in a succession of interest rate hikes that have occurred in the past couple of years as the SARB attempts to combat inflation.

Will it increase further? Experts believe the interest rate hikes may be coming to an end. “And next year, the rate could even start coming down, economists and property experts say” writes iol.co.za.

Is it a good time to apply for a home loan?

At its current rate, the prime lending rate is still lower than the average of 13%-15.5%.

House prices are expected to rise at a slower rate than inflation, and Lightstone, a provider of data analytics on the property market, shows that we’re still in a buyer’s market.

How to lower your interest rates

Keep your interest rates as close to the prime lending rate as possible through the following measures:

Ensure you have a strong credit record

A credit record of at least 610+ is required for a chance of home loan approval.

Here’s a more detailed breakdown:

• 781 to 850. Excellent.
• 661 to 780. Good.
• 610 to 660. Fair.
• 500 to 610. Poor.
• 300 to 499. Very poor.

If your credit record is too low, you can take steps to improve your credit record, such as by paying off debts.

Pay a higher deposit

The size of your deposit will also affect your interest rates. The higher the deposit, the less risk to the bank, and therefore lower monthly repayments and interest rates.

Apply through multiple banks

Despite the sluggish economy, demand for houses remains high. The banks are competing to offer better home loan packages.

So applying to multiple banks improves your chances of obtaining a home loan with low interest rates.

You can apply with ooba Home Loans. We submit your application to multiple banks and allow you to compare deals so you can choose the one with the lowest interest rates.

First, determine your chances of home loan approval

You can find out your credit record, along with the home loan you’ll likely qualify for, by getting prequalified with ooba Home Loans.

You can get prequalified by contacting an expert at ooba Home Loans or by using our free, online prequalification tool, the Bond Indicator.