Interest rates: Home loan repayments increase by thousands, tens of thousands of rands

You may be shocked to see how much more you have had to pay on your home loan this year. Picture: Mikhail Nilov/Pexels

You may be shocked to see how much more you have had to pay on your home loan this year. Picture: Mikhail Nilov/Pexels

Published Nov 28, 2023

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South African homeowners may feel a little more at ease following the South African Reserve Bank’s decision to keep the repo rate unchanged, but when you see exactly how much extra money you have had to part ways with this year as a result of the hikes, you may not feel so great.

Because the interest rate increased bit by bit during the first six months of 2023 before remaining stable from July, you may not fully realise that you have actually watched thousands – and even tens or hundreds of thousands – of extra rands come out of your bank account.

The country ended 2022 with the interest rate at 10.5 percent, but just a few weeks later, at the end of January, it increased to 10.75 percent; in March, it jumped to 11.25 percent, and then, in May, was hiked to 11.75 percent – the figure it has ended the year on.

This means that homeowners are now paying 1.25 percent more for their homes. It may not sound too bad but to illustrate just how much extra money you have had to find this year to hang on to your home – on top of all the other increased costs of living, IOL has done some maths.

Based on the approximate bond repayment amounts you were paying at the end of 2022, we calculated only the increases you had to cough up as a result of the interest rate changes this year.

Here are some numbers that could leave you feeling a little ill:

R1m HOME LOAN

R8,178: how much more you have paid this year on your home loan

– R9,984: your monthly repayment at the end of 2022

– R10,837: your monthly repayment at the end of 2023

– R853: total increase in your monthly bond repayment amount

R1,5m HOME LOAN

– R12,270: how much more you have paid this year on your home loan

– R14,976: your monthly repayment at the end of 2022

– R16,256: your monthly repayment at the end of 2023

– R1,280: total increase in your monthly bond repayment amount

R2m HOME LOAN

– R16,356: how much more you have paid this year on your home loan

– R19,968: your monthly repayment at the end of 2022

– R21,674: your monthly repayment at the end of 2023

– R1,706: total increase in your monthly bond repayment amount

R2,5m HOME LOAN

– R20,448: how much more you have paid this year on your home loan

– R24,960: your monthly repayment at the end of 2022

– R27,093: your monthly repayment at the end of 2023

– R2,133: total increase in your monthly bond repayment amount

R3m HOME LOAN

– R24,546: how much more you have paid this year on your home loan

– R29,951: your monthly repayment at the end of 2022

– R32,511: your monthly repayment at the end of 2023

– R2,560: total increase in your monthly bond repayment amount

R3,5m HOME LOAN

– R28,958: how much more you have paid this year on your home loan

– R34,943: your monthly repayment at the end of 2022

– R37,930: your monthly repayment at the end of 2023

– R2,987: total increase in your monthly bond repayment amount

R4m HOME LOAN

– R32,722: how much more you have paid this year on your home loan

– R39,935: your monthly repayment at the end of 2022

– R43,348: your monthly repayment at the end of 2023

– R3,413: total increase in your monthly bond repayment amount

R5m HOME LOAN

– R40,900: how much more you have paid this year on your home loan

– R49,919: your monthly repayment at the end of 2022

– R54,185: your monthly repayment at the end of 2023

– R4,266: total increase in your monthly bond repayment amount

R8m HOME LOAN

– R65,452: how much more you have paid this year on your home loan

– R79,870: your monthly repayment at the end of 2022

– R86,697: your monthly repayment at the end of 2023

– R6,827: total increase in your monthly bond repayment amount

R10m HOME LOAN

– R81,810: how much more you have paid this year on your home loan

– R99,838: your monthly repayment at the end of 2022

– R108,371: your monthly repayment at the end of 2023

– R8,533: total increase in your monthly bond repayment amount

While 2024 is expected to bring with it some reprieve, with interest rates predicted to hold steady for at least the first half of the year before dropping in the latter half, SARB Governor SARB Governor Lesetja Kganyago warned that there are still serious upside risks to inflation. Should these dangers start to materialise, the Monetary Policy Committee is ready to act to curb inflation through further interest rate hikes.

* Home loan repayment figures are based on a 20-year term and zero deposit.

IOL Business