Home loan interest rates and what the latest decision means for you
Even small monthly top-ups can shave years off a home loan and save hundreds of thousands of rands in interest. The earlier extra repayments are made, the greater the benefit — especially while interest rates remain elevated.South Africa’s Reserve Bank (SARB) has opted to keep the repo rate unchanged at 6.75% following its first Monetary Policy Committee (MPC) meeting of 2026. While many homeowners and buyers were hoping for the start of a more aggressive rate-cutting cycle, the decision reflects a cautious, wait-and-see approach in a complex global environment.
For homeowners, this announcement doesn’t bring immediate relief, but it does provide clarity and stability at a time when certainty matters just as much as lower costs.
At a glance: What the rate hold means
- Homeowners: repayments stay the same for now.
- Buyers: borrowing costs are stable — use the time to prepare.
- Refinancing: still worth checking if you can negotiate a better rate.
- If you can, pay extra: small additional repayments can cut long-term interest.
No change to monthly bond repayments
The most immediate takeaway for homeowners is straightforward: if you’re on a variable home loan, your monthly bond repayment remains unchanged for now. With the prime lending rate holding at 10.25%, households won’t see an increase or decrease in their instalments as a result of this decision.
For many families still navigating high living costs, this stability is welcome. It allows homeowners to plan their monthly budgets with confidence, without needing to adjust for higher repayments or recalibrate spending to account for sudden savings.
While this may feel underwhelming for those hoping for a cut, it’s important to recognise that holding rates steady also avoids adding new pressure to already stretched household finances.
A signal of caution, not confidence
Although inflation remains relatively well contained and the rand has shown recent strength, the SARB’s decision highlights its cautious stance amid rising global uncertainty. Geopolitical tensions, volatile commodity markets, and a guarded approach by major central banks, particularly the US Federal Reserve, all play a role in shaping local policy decisions.
Governor Lesetja Kganyago noted that the MPC’s decision was closely split, reinforcing the idea that the door to future rate cuts is not closed, but neither is it guaranteed in the near term.
For homeowners, this means it would be premature to assume that meaningful rate relief is just around the corner. Instead, the Reserve Bank appears focused on protecting long-term stability rather than reacting too quickly to short-term improvements.
What homeowners should do during a rate pause
A stable interest rate environment is often underestimated, but it presents an opportunity for proactive financial planning. Homeowners who can afford to do so may want to consider using this period to strengthen their financial position.
Making additional bond repayments, even small ones, can significantly reduce the total interest paid over the life of a home loan. When rates eventually do come down, homeowners who used this pause strategically may find themselves in a much stronger position, with lower balances and shorter loan terms.
Even small monthly top-ups can shave years off a home loan and save hundreds of thousands of rands in interest. The earlier extra repayments are made, the greater the benefit, especially while interest rates remain elevated. Below is an example of what extra payments could do to your bond over the course of its life if you made extra payments from the start.
| Bond amount | + R100 pm | + R500 pm | + R1 000 pm | + R1 500 pm |
|---|---|---|---|---|
| R1 000 000 | Save ~R45 400 0.6 yrs sooner | Save ~R220 400 2.8 yrs sooner | Save ~R365 700 4.7 yrs sooner | Save ~R477 400 6.2 yrs sooner |
| R1 500 000 | Save ~R50 100 0.4 yrs sooner | Save ~R230 200 1.9 yrs sooner | Save ~R404 700 3.4 yrs sooner | Save ~R548 600 4.7 yrs sooner |
| R2 000 000 | Save ~R35 200 0.2 yrs sooner | Save ~R242 400 1.5 yrs sooner | Save ~R440 900 2.8 yrs sooner | Save ~R591 000 3.8 yrs sooner |
| R2 500 000 | Save ~R49 900 0.2 yrs sooner | Save ~R230 600 1.2 yrs sooner | Save ~R449 600 2.2 yrs sooner | Save ~R629 600 3.2 yrs sooner |
| R3 000 000 | Save ~R35 100 0.2 yrs sooner | Save ~R239 400 1.0 yrs sooner | Save ~R460 300 1.9 yrs sooner | Save ~R661 300 2.8 yrs sooner |
| R4 000 000 | Save ~R15 400 0.1 yrs sooner | Save ~R237 900 0.8 yrs sooner | Save ~R484 800 1.5 yrs sooner | Save ~R659 100 2.1 yrs sooner |
Homeowners can also opt to switch to:
- Bi-weekly payments: Instead of making monthly payments, switch to a bi-weekly schedule. This results in 26 half-payments, equivalent to 13 full payments per year, helping you make an extra month's payment annually.
- Round-Up Payments: Rounding up your monthly mortgage payment to the nearest thousand (or even hundred) Rand can make a substantial impact over time. It's a painless way to add a little extra to each payment.
It’s also a good time to review household budgets, reassess insurance cover, and build emergency savings. Stability creates space for smart decision-making, rather than reactive adjustments.
Fixed vs variable rates: is now the time to reconsider?
Interest rate pauses often reignite debate around fixed versus variable home loan rates. While variable rates remain the most common choice in South Africa, some homeowners may be tempted to explore fixed-rate options in search of certainty.
However, fixing a rate should never be based solely on short-term expectations. Fixed rates often come at a premium and may include limitations on additional repayments or early settlement. With the rate cycle potentially turning, homeowners should carefully compare options and seek professional advice before making changes.
In many cases, remaining on a variable rate while focusing on extra repayments may offer greater long-term flexibility and savings.
If you are considering this option, we do a deep dive on this topic here: Should you fix your home loan interest rate?
What this means for buyers planning to enter the market
For prospective buyers, the decision to hold rates steady sends a mixed but manageable message. On the one hand, borrowing costs haven’t come down yet. On the other hand, affordability has at least stopped deteriorating.
This creates a window for buyers to prepare properly: securing pre-approval, improving credit profiles, and saving for deposits. When interest rates do eventually ease, buyers who are already financially ready will be best positioned to act quickly.
In a market where well-priced homes continue to sell fast, preparation remains one of the most powerful advantages a buyer can have.
Here is a guide to ensure you are pre-approved and ready for a home loan application
Looking ahead: patience remains key
While the SARB’s decision may feel like a missed opportunity for relief, it reflects a broader commitment to financial stability. For homeowners, the message is not one of alarm, but of patience and prudence.
The rate cycle appears to be shifting, but cautiously and incrementally. Any future cuts are likely to be measured rather than dramatic, and timing will depend heavily on global economic conditions.
In the meantime, homeowners can take comfort in knowing that the pressure isn’t increasing. Stability, while less exciting than relief, provides the foundation for better financial decisions and, ultimately, stronger household resilience.
As always, understanding how interest rate decisions affect your specific situation is key. Whether you’re managing an existing bond or planning your next property move, staying informed and prepared will help you navigate the months ahead with confidence.
