The Monetary Policy Committee (MPC) is expected to start the rate-cutting cycle this month, which is the start of notable savings for house and car owners.
The average South African with a bond and car loan can expect R1,800 per month relief by July 2025, starting with R301 per month if the Reserve Bank’s MPC starts cutting interest rates this month.
According to the latest DebtBusters Debt Index report for Q2 2024, those who filed for debt counselling are currently paying an average interest rate of 12.3% on their home loans and 15.3% on car loans. For instance, South Africans who purchased a home valued at R1.3 million at the start of the rate hike cycle have seen their bond repayments increase by an additional R4,800 per month due to the 12.3% interest rate.Similarly, individuals who financed a vehicle with an average value of R410,000 have been paying an additional R1,705 per month, amounting to R25,575 over the same period.
The market now expects an interest rate cut of at least 25 basis points in September, providing immediate relief for South Africans with mortgages and car loans.
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