It has been a difficult few years for the average South African, so you’ll be happy to hear that the South African Reserve Bank has cut its interest (or repo) rate.
The governor of the South African Reserve Bank’s announced that the repo rate will decline by 0.25% from 6.75% to 6.5%.
However, you might be unsure as to how this affects you, so read further.
If you have a bond, car repayments or kind of debt, this means you will have a bit more money in your pocket.
The Reserve Bank’s interest rate, which is called the repo rate, is connected to the interest rate on the money you owe your bank.
So if the Reserve Bank cuts the interest rate, so does your local bank and this inevitably means that you will have a bit more money to buy the essential things.
For example, if your bank charged 10.25% on your bond, they will now cut their interest and you will now be charged 10%.
This means that, if you have a R1million bond on a property that you are repaying over a 20 year period, you could end up with a R150 saving.
Yes, it might not seem like much, but given how tough things have been, it might help with paying for those extra items that you need.