Finance · South Africa
New Repo Rate Link Could Make Home Loans Cheaper and Clearer
Moneyweb · 2026/02/21
Summary
South Africa is considering changing how home loan interest rates are set by moving away from the prime rate and linking them more closely to the repo rate. The repo rate is the interest rate set by the South African Reserve Bank, which influences the cost of borrowing money. Stephan Potgieter, the CEO of BetterBond, believes this change could make home loan pricing simpler and more transparent for borrowers. Currently, home loans are based on the prime rate, which can be confusing and sometimes unpredictable. By aligning loans directly with the repo rate, borrowers may better understand how their interest rates are calculated, potentially leading to fairer and more competitive loan offers. This shift could also improve the overall economy by making lending more straightforward and boosting confidence in the housing market. For homeowners and buyers, this means better clarity on interest costs and possibly lower rates, making home ownership more affordable.
OnABudget takeaway: This change could help you get home loans with clearer and potentially cheaper interest rates, making it easier to plan your budget. Small business owners could also benefit from a more transparent borrowing system tied directly to the repo rate.