Which SA bank has the lowest interest rate on home loans in 2026?

Article summary

• Each bank has different lending criteria, and some banks might offer you more favourable interest rates than others following the latest SARB rate cut in November 2025.
• With the help of a home loan comparison service such as ooba Home Loans, you can apply to multiple banks and compare the packages they offer in today’s improving market.
• Applying to multiple banks via a home loan comparison service gives you the best chance of securing the lowest interest rate available.
• The latest rate cut has created an even better opportunity for both first-time buyers and existing homeowners to secure better deals.

A home loan enables you to fund the purchase of your home with a loan from the bank, making homeownership a realistic option for many South Africans. It’s also become even more accessible with the continued series of interest rate cuts. 

Of course, the bank reserves the right to reject your home loan application, and even if they approve it, you will have to pay interest on the loan amount. However, with rates now at their lowest levels since the COVID-19 pandemic, there’s never been a better time to explore your options.

We recommend that you don’t only apply to one bank. Each bank has different lending criteria, and some banks might offer you more favourable interest rates than others. 

Many home buyers don’t realise the significant benefit of shopping around for the best deal, especially in today’s competitive environment, where banks are eager to attract new business.

The bank with the best interest rate

We cannot provide an accurate list of banks and their interest rates as the numbers are constantly fluctuating, particularly following the South African Reserve Bank’s ongoing rate-cutting cycle. However, we can help you determine the best interest rates currently on offer by submitting your application to multiple banks.

APPLY with ooba Home Loans, and we will enable you to compare interest rates offered by the banks, ensuring you get the most competitive deal available in today’s market. We have an average interest rate concession of -0,69%. 

In the meantime, here’s what you should know about the current interest rate environment:

How do banks determine interest rates?

The South African Reserve Bank (SARB) sets the repo rate, which directly influences the prime interest rate, the basis for all other interest rates, including home loan interest rates. 

The bank’s interest rate on your home loan is linked to the prime interest rate, either above or below prime, depending on your credit risk profile and the current competitive landscape.

What to know about current interest rates

Breaking news: As of January, 2026, the prime lending rate is now 10.25%, the lowest it’s been since the COVID-19 pandemic. This follows an extraordinary series of rate cuts that began in September 2024:

• September 2024: First cut in years – from 11.75% to 11.50%
• November 2024: Second cut – from 11.50% to 11.25%
• January 2025: Third cut – from 11.25% to 11.00%
• May 2025: Fourth cut – from 11.00% to 10.75%
• July 31, 2025: Fifth consecutive cut – from 10.75% to 10.50%
• November 20, 2025: Sixth consecutive cut — 10.50% to 10.25%

Latest: January 2026 announcement left rate untouched.

The cumulative impact: Interest rates have dropped by a massive 1.50% (150 basis points) since September 2024, creating substantial savings for homeowners.

What this means for your pocket

It means potential savings on home loans as demonstrated in the below chart:

Home 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

Future outlook

The Reserve Bank has signalled a shift toward targeting inflation at the lower end of its 3-6% range, aiming for 3% rather than the previous midpoint of 4.5%. This suggests the potential for further rate cuts ahead.

However, global trade tensions and domestic economic challenges mean the pace of cuts may be measured.

Can you get the best deal by applying directly through your bank?

Applying for a home loan through your private banker may not necessarily get you the best deal, as your banker’s first priority is to get the best deal for the bank, not necessarily for you. 

Furthermore, if the application gets rejected, you will either have to apply to a different bank or wait around until circumstances change. 

Meanwhile, the clock is ticking on your Offer to Purchase, and you may end up losing the home you have your heart set on. In today’s competitive market, where banks are actively pursuing home loan business, having multiple options becomes even more valuable.

Improve your chances of getting a low interest rate

The interest rate on your home loan depends largely on your financial circumstances. The less of a risk the bank perceives you to be, the lower your interest rate – and with base rates now at post-pandemic lows, qualified borrowers are seeing some of the most competitive offers in years. 

Out of the factors you have control over, your credit record is the most important. The bank uses your credit record to determine how much of a risk you are. You can improve your credit score by:

• Paying off debt – Reduce your overall debt levels
• Pay bills on time – Consistent payment history builds trust
• Avoid owing more than a third of your gross income on debt – Keep debt-to-income ratios manageable
• Close accounts when you’ve paid the balance owed – This indicates responsible credit management and reduces risk perception

You can find out your credit score 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.

Why now is an exceptional time for home buyers

The current interest rate environment presents an unprecedented opportunity:

• First-time buyers benefit from improved affordability calculations and the lowest borrowing costs since the pandemic.
• Existing homeowners can explore refinancing options to take advantage of dramatically lower rates.
• Property investors are seeing renewed interest as borrowing costs decrease significantly.
• The property market is showing signs of recovery with increased buyer confidence following the rate cuts.

With the Reserve Bank’s new focus on achieving 3% inflation, there’s potential for rates to fall even further, making this an ideal time to get pre-approved and position yourself for the best possible deal.

Get pre-approved for a home loan today

Don’t let this historic rate-cutting cycle pass you by. Whether you’re a first-time buyer or looking to refinance, our experts can help you secure the most competitive rates available from multiple banks.

Get pre-approved with our online pre-approval tool, or speak to an expert today.