Interest rate cut surprises, delights South Africans

2012-07-20 00:00

JOHANNESBURG — South Africans were surprised and for the most part delighted by the Reserve Bank’s decision on Thursday to cut its interest rate for banks, known as the repo rate, by 50 basis points.

This was the first reduction in interest rates since November 2010. FNB Home Loans spokesman Ewald Kellerman said households should use the lower rates to strengthen their balance sheets. “This may mean trimming the debt levels and increasing the savings rate.”

The new rate means a homeowner paying a bond of R650 000 will save about R207 per month.

Repayments on a bond of R800 000 will come down by R255 per month.

As for cars, excluding deposits, insurance premiums and balloon payments, a vehicle owner with a R100 000 loan would save about R24 per month.

Cars that cost R200 000 will cost R48 per month less in interest.

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