Here’s how much R1m bond repayments will cost after repo rate hike

May 29, 2026 By: Alfred0 comments

South African homeowners will soon feel fresh pressure on their finances after the country’s central bank hiked the repo rate by 25 basis points to 7%, pushing up borrowing costs at a time when households are already battling rising food, fuel and electricity prices.

The hike, announced by SA Reserve Bank (Sarb) governor Lesetja Kganyago on Thursday, means bond repayments are expected to climb from the next bond payment, leaving many homeowners paying an extra hundred or more rand more on their monthly home loans.

Repo rate hike adds a few hundreds

Stephen Whitcombe, MD of the FIRZT Property Group, says the increased announcement provides an opportunity for existing homeowners to reassess their financing arrangements.

“If you have been servicing your home loan consistently for several years and have built up a strong payment history, now may be a good time to speak to your bank about renegotiating your interest rate,” he adds. “They may well be willing to offer improved terms to retain a good client.”

He says that for homeowners with a 20-year bond of R1 million, the 0.25% increase translates to an approximate monthly repayment increase of R165 to R175, while a R2 million bond could see repayments rise by roughly R330 to R350 per month.

Repo rate hike should not scare future homeowners

Whitcombe says the recent repo rate hike should not scare anyone looking to buy a home; people just need to enter the market strategically.

“The reality is that if rates continue to edge upwards, or even if they stay the same now, it becomes even more important than before to secure the most competitive home loan, and for prospective buyers to engage with a reputable mortgage originator before signing an offer to purchase,” he adds.

“A good originator will negotiate aggressively with multiple banks on a buyer’s behalf and can often secure a more favourable lending rate than a buyer may obtain independently. And even a modest rate concession can result in meaningful savings over the life of a home loan.”

Buy smarter, but don’t wait

Berry Everitt, CEO of the Chas Everitt International property group, shares Whitcombe’s sentiments about entering the property market strategically. However, he cautions people from borrowing at the absolute maximum banks are willing to lend.

“The smartest buyers in this market are stress-testing their finances and asking themselves: could we still comfortably afford this home if/ when rates rise again, fuel and food become even more expensive, and municipal bills increase?”

This advice comes at a time when South Africans are still under financial strain, despite the interest rate decreases of the past two years.

According to the latest PayInc Net Salary Index, the average nominal net salary declined to R21 228, while inflation-adjusted earnings fell by 2.7% compared to a year ago, to their lowest real level in two years

“This means that many households are effectively earning less in real terms than they were a year ago, even before taking higher transport and utility costs into account,” says Everitt. “That makes careful budgeting critical now.”

Debt levels

He further acknowledges that debt levels are also still placing pressure on affordability for many people.

The debt levels data “show just how stretched many consumers already are, and for first-time buyers especially, this may mean adjusting expectations and considering a smaller property or buying in a more affordable suburb than originally planned.”

However, Everitt cautions against postponing homeownership indefinitely in the hope that interest rates will decline next year.

“Many people think they should simply wait for rates to come down before buying, but that could be a costly mistake. We are already seeing stock shortages beginning to emerge in several areas of the market, and that is placing upward pressure on prices.”