Reserve Bank cuts repo rate to 4.25% - here's how much money you are saving
88 days ago
The South African Reserve Bank (Sarb) announced on 14 April, an emergency cut of the repo rate by another 100 basis points.
This brings the country's rate to 4.25%.
The Monetary Policy Committee (MPC) of the @SAReserveBank has decided to cut the repo rate by 100 basis points. This takes the repo rate to 4.25% per annum.— SA Reserve Bank (@SAReserveBank) April 14, 2020
What does this mean? And how much money can South Africans expect to save?
Kfm Mornings speak to The Money Show presenter Bruce Whitfield.
We got an interest cut, another one. They call it 100 basis points, you can call it 1 percentage point.Bruce Whitfield, The Money Show presenter
It got me thinking, how much money you are saving at the moment and you don't even realise it.Bruce Whitfield, The Money Show presenter
Let's assume that you have a R1 million mortgage, and the bank has said please pay it back to us over 20 years. Because we like you we're going to give you the prime lending rate.Bruce Whitfield, The Money Show presenter
This time last year, the prime lending rate was at 10.25%. Now what we've seen is four interest rate cuts in the last year.Bruce Whitfield, The Money Show presenter
That means that money is 24% cheaper than it was a year ago. We've gone from 10.25% interest rate to 7.75%. It's a big, big difference, especially over a long period of time.Bruce Whitfield, The Money Show presenter
It means, this week's interest rate cut, on that R1 Million that you're borrowing over 20 years, you're going to be paying R628 a month less in interest next month. Which is big!Bruce Whitfield, The Money Show presenter
For more detail, listen to Kfm Mornings' interview with Bruce Whitfield in the audio below.
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This article first appeared on KFM : Reserve Bank cuts repo rate to 4.25% - here's how much money you are saving