Skip to content

The current repo rate (+ 5 things you probably didn’t know)

The repo rate affects interest rates, which in turn affects how much you'll have to pay into your home loan. Here's what you need to know about repo rates.

Repo Rate

Article summary

  • The repo rate affects the interest rate at which your bank will lend, which in turn affects the cost of your home loan.
  • The repo rate was at its lowest in decades during the pandemic, but there has since been a succession of increases by the South African Reserve Bank.
  • Further repo rate increases are expected for 2022.

If you’re applying for a home loan, the repo rate is one of the most important factors to take into account. Here’s what you need to know about the repo rate, and how it will affect your home loan.

Repo rate: What is it at currently?

The current repo rate is 4.75%.

This means the prime lending rate is 8.25%.

Recent increases:

  • 0.25% in November 2021
  • 0.25% in January 2022
  • 0.25% in March 2022
  • 0.50% in May 2022

Why the increases? During the pandemic era, the South African Reserve Bank was trying to stimulate the economy. Now they are adjusting for inflation.

5 Things you should know about the repo rate:

1. The prime lending rate will always be higher than the repo rate

The repo rate is the rate at which the South African Reserve Bank lends to commercial banks. Banks lend at a rate that is a little higher than the repo rate, to cover their basic profit margin. This is known as the prime lending rate.

2. The repo rate affects your home loan

As mentioned, the repo rate affects the prime interest rate, which in turn affects the interest rate of your home loan. The interest rate is what you have to pay over and above the amount you pay monthly to the bank in order to repay your home loan.

3. How long will the repo rate remain at the current level?

FNB predicts further hikes for 2022, with each hike bringing the repo rate up a further 0.25%. The hikes will probably happen in May and July, resulting in a repo rate of 4.75% by 2023 (and a prime lending rate of 8.25%).

4. A fixed-rate home loan remains at the same interest rate regardless of the repo rate (for an agreed-upon period)

When your bond is registered, you can choose to have a fixed-rate or variable-rate loan.

Under a fixed-rate home loan, you keep paying the same home loan repayment amount monthly, regardless of fluctuations in the market, for an initial agreed period.

However, fixed interest rates expire after the initial agreed period, after which you will either have to revert to variable interest rates, or negotiate a new fixed rate with the bank.

Furthermore, it’s more of a risk for the bank, so they’re likely to charge you a higher rate out the gate.

But it does enable you to budget with greater accuracy.

5. A home loan comparison service can help you secure lower interest rates

Regardless of the repo rate, a home loan comparison service, such as ooba Home Loans, can secure you lower interest rates by submitting your application to multiple banks.

You can then compare deals and choose one with an interest rate as close to the prime lending rate as possible.

We also offer a range of tools that can make the home buying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.

Get pre-approved for a home loan in just 2 minutes

Get pre-approved

Ranked #1 in Financial Services on Hellopeter


Average rating of 4.82 from over 3 000 reviews

Simply The Best

Ooba home loans services are simply the best. My Consultant Bianca Dancer was so hands on and helpful from the get go. She guided me through the entire process and put me at ease being a first time buyer. I highly recommend their services.

Tia J

Excellent Service

Jay Govender and Maleshini Reddy from OOBA provided outstanding assistance and guidance in securing our home loan. Response times were excellent and they were professional and friendly.

Brice G

Bond Application

Estelle Vorster was really helpful in securing the best deal for my home loan, she not only negotiated a lower interest rate she went as far as securing 50% discount on the transfer costs.

Butana M