Bond originator at MyProperty Home Loans, Michael-Anne Abrahams, says that while the latest rate cut may seem modest, it has a tangible impact on monthly bond repayments.
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The South African Reserve Bank’s Monetary Policy Committee (MPC) announced a 25 basis point interest rate cut in May 2025 last week, which Abrahams says is a move welcomed by homeowners and potential buyers looking for some relief in a high-cost borrowing environment.
“While the cut may seem modest, it has a tangible impact on monthly bond repayments, especially for new buyers entering the market or existing homeowners looking to refinance. The reduction can ease affordability for many households.”
Prime lending rate
“A 25bps cut means the prime lending rate drops from 11.50% to 11.25%. On a R2 million home loan, that’s a saving of roughly R350 per month. Over the lifetime of the loan, it really adds up,” she explains.
However, Abrahams warns that interest rate cuts shouldn’t lead to rushed decisions. “Even with a lower rate, affordability should still be your starting point. Buyers need to take into account all the costs involved in a property purchase — including legal fees, insurance, and transfer duties.”
The value of using a bond originator
More importantly, she highlights the value of using a bond originator when applying for a home loan.
“A bond originator gives you access to multiple banks. We don’t just accept the first offer — we negotiate with the banks on your behalf to secure the most competitive rate possible,” she says.
For first-time buyers, especially, this can translate into long-term savings. A 0.5% difference in your home loan rate could mean thousands of rands saved over 20 years.
“We also help clients understand the fine print — from fixed versus variable rates to understanding what your affordability looks like from the bank’s perspective,” Michael-Anne adds.
While the rate cut is a positive sign for the property market, it’s also a timely reminder for buyers to make informed decisions and seek expert advice when navigating the home loan process.
