The current prime lending rate in South Africa
Find out what the prime lending rate is and how it will affect your home loan. We also explain how you can keep your interest rates low.
Article summary
- The current prime lending rate is 11.0
- The interest rate was cut by 25 basis points in September 2024; the first interest rate cut in several years, and then again in November and January.
- Experts believe more interest rate cuts are on the cards in 2025.
- Keep your interest rates low by building a good credit record.
The current prime lending rate is 11.0%, based on a repo rate of 7.5% as determined by the South African Reserve Bank.
The prime lending rate is the most important factor in how home loans work.
Here’s what you need to know about the current prime lending rate.
What does prime interest rate mean?
- The minimum interest rate at which banks are willing to lend. This will be the repo rate plus what the bank charges to make a profit.
- If you apply for a home loan, your personal interest rate will be the prime interest rate plus what the bank adds on, which in turn will be determined by how much of a risk they consider you to be.
- A solid financial situation on your part (reflected in your credit score) will earn you lower interest rates.
The current state of the prime lending rate
The last few years have seen a series of interest rate hikes as the South African Reserve Bank sought to combat inflation.
But in 2023, experts predicted the interest rate hikes would cease. This prediction was borne out as the SARB opted to leave the interest rate unchanged in their September 2023 meeting, keeping the prime lending rate at 11.75%.
Experts further predicted interest rate cuts on the horizon. Sure enough, in September 2024, the SARB reduced the interest rate from 11.75% to 11.5%.
Further cuts followed in November and January, bringing the interest rate down to 11.00 (as of February 2025).
Experts predict more interest rate cuts for 2025, although they expect the SARB will only cut 25 basis points at a time. The interest rate may be as low as 10.50% by the end of 2025.
Potential interest rate cuts on the horizon
The same experts who predicted the interest rate cut in 2024 are predicting further interest rate cuts for 2025.
Recent interest rate cuts in the UK are a positive sign for the South African economy.
How much do you save after the interest rate cut?
Cuts result in significant long-term savings.
When you take into account that the interest rate was 11.75% for most of 2024, the recent cuts make 2025 a year for substantial savings.
Here’s what you’ll save on a home loan in 2025 versus the 2024 interest rate (assuming a 20-year term and 10% deposit).
| Loan value | Monthly repayment at 11.75% | Monthly repayment at 11.00% | Monthly savings | Total savings |
| R1 million | R9 753 | R9 290 | R463 | R111 280 |
| R2 million | R19 507 | R18 579 | R928 | R222 561 |
| R3 million | R29 260 | R27 869 | R1391 | R333 841 |
| R4 million | R39 013 | R37 159 | R1854 | R445 121 |
| R5 million | R48 767 | R46 448 | R2319 | R556 401 |
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
Demand for houses is high, and 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 pre-approved with ooba Home Loans.
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.
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