How much it costs to pay off a R2 million home loan in South Africa
· The South African
The South African Reserve Bank (SARB) has left interest rates unchanged, providing welcome certainty for homeowners with variable-rate home loans.
Visit h-doctor.club for more information.
Following Thursday’s Monetary Policy Committee (MPC) meeting, the repo rate remains at 7.0%, while the prime lending rate stays at 10.5%.
For anyone financing a R2 million property over 20 years at prime, that means monthly repayments remain unchanged at just under R20 000.
Monthly repayment on a R2 million bond
Based on a 20-year home loan at the current prime lending rate of 10.5%, the monthly repayment on a R2 million bond is:
- Bond amount: R2 000 000
- Interest rate: 10.5% (prime)
- Loan term: 20 years / 240 months
- Monthly repayment: R19 968
Because the SARB kept rates on hold, homeowners avoided what would have been another increase in monthly repayments.
What if rates had increased?
Had the Reserve Bank raised rates by 25 basis points, repayments on a R2 million bond would have risen by approximately R335 per month.
While that may appear modest, over the course of a year it would have added more than R4 000 to a homeowner’s mortgage costs.
Other bond repayment examples
At the current prime lending rate of 10.5%, monthly repayments over 20 years are:
Bond amountMonthly repaymentR1 millionR9 984R1.5 millionR14 976R2 millionR19 968R2.5 millionR24 960R3 millionR29 951To note, however, paying R19 968 over 20 years (or 240 months) equates to a total repayment of R4 792 223, far in excess of the initial R2 million bond.
MPC divided on the decision
SARB Governor Lesetja Kganyago confirmed that the Monetary Policy Committee was not unanimous in its decision.
Four of the six members voted to leave interest rates unchanged, while two preferred a 25 basis point increase, highlighting ongoing concerns about inflation.
Next interest rate decision
The Reserve Bank’s next Monetary Policy Committee meeting is scheduled for Thursday, 23 September 2026.
With inflation still above the Bank’s preferred midpoint target and global risks – including higher oil prices and geopolitical tensions – remaining elevated, borrowers will be watching closely to see whether rates remain on hold or begin moving higher again.
For the next two months at least, homeowners with a R2 million bond can budget on monthly repayments of R19 968, following the Reserve Bank’s latest decision.