Prime Lending Rate Facts Update 2020
Updated: Jul 8, 2020
The Prime Lending Rate of South Africa has dropped substantially in 2020. Making 2020 the optimal year to invest! So here are some basic facts you should know about how the Prime lending rate has affected the South African residential property environment positively.
The difference between South African’s all time high Prime Lending Rate in the month of August 1998 till the month of May 2020 is a reduction of 18.25 basis points
The Prime Lending Rate dropped by an additional 50 basis points (bp) on the 21st of May 2020 (From 7.75% to 7.25%)
The Prime Lending Rate hasn’t been this low since 1973,
The Prime Lending Rate is at a all-time low not seen in 47 years.
The rate cuts in the first five month of 2020 has made it much easier to obtain a home loan.
Home owners are now paying far less per month on their bond repayments. For example, on a R1 000 000 bond over a period of 20 years, your repayment amount since the 16th of January would have dropped from R9 485 in January 2020 to R7 903 in June 2020.
The Prime Lending Rate is used as a index for consumer lending from commercial banks
The Repo Rate is the index used at which the Government lends to commercial banks
The Repo Rate also dropped over 42 % within the first five months of the year which also puts financial relief on existing house owners repaying their bonds.
Facts obtained, and more information can be found at: