How much you pay on a R1 million – R3 million bond in South Africa right now

An increase in the repo rate by 25 basis points earlier in November, to 3.75%, left many homeowners in South Africa doing mental calculations on their monthly home loan repayments.

Ooba Group chief executive officer, Rhys Dyer, believes that it’s still a good time to be a homeowner and that the increase will have little effect on the sustained demand for home loans. “The repayment amount on a R1 million bond will increase by R151 per month – from R7,753 up to R7,904.

Data from bond originator, Ooba shows that the average house price in the third quarter was up 5.4% from a year ago, to R1.375 million, and up 3.2% for first-time buyers, to R1.117 million. The average age of a bond applicant was 38, three years higher than the average age of a first-time buyer.

It means that the majority of the country’s homeowners will only have to budget for an increase of under R200 on their monthly bond repayments, said Dyer. “A marginal increase in the repo rate was imminent. It’s important for homeowners to budget accordingly and to plan for every eventuality.”

Looking to the higher end of the home loan spectrum, Dyer said that the repo increase stands to impact this bracket albeit not significantly. “Home loan repayments on a home purchased for R2.5 million will increase by R377 per month – up from R19,382 to R19,759) while homes purchased for R3 million will increase by R452 per month – from R23,259 to R23,711,” he said.

The local banking industry also appears to be optimistic about the future of the South African residential property market, said Dyer. The current lending landscape remains fiercely competitive, which is evidenced in the softening of their deposit requirements and their approvals at interest rates on average below prime.”

Given the hike, the table below outlines what South Africans will now be paying on their monthly bonds, based on a 20-year loan.

Bond amount 7% 7.25% Change
R1 million R7 753 R7 904 +R151
R1.25 million R9 691 R9 980 +R189
R1.5 million R11 629 R11 856 +R227
R1.75 million R13 568 R13 832 +R264
R2 million R15 506 R15 808 +R302
R2.25 million R17 444 R17 783 +R339
R2.5 million R19 832 R19 759 +R377
R2.75 million R21 321 R21 735 +R414
R3 million R23 259 R23 711 +R452

Read: How much more you will pay on your bond after the latest interest rate hike

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