The South African Reserve Bank has raised the repo rate by 25 basis points, to 7.25%, effective from 25 September 2026. The 23 September decision was unanimous, and the prime lending rate — the benchmark South African banks price home loans against — moves to 10.75%, up from 10.50%. For anyone on a variable-rate bond, this is the second increase of 2026: the May meeting delivered the first, July held, and September has now tightened again.
What the hike adds to your repayment
Variable-rate home loans reprice at your bank's next repricing date, which varies by bank and product. Once the new rate is through, here is what the 25 basis point move means at prime with no margin, on a 20-year term — recalculated from the standard annuity formula, not copied from anywhere:
| Bond size | At 10.50% | At 10.75% | Difference / month |
|---|---|---|---|
| R 1 000 000 | R 9 984 | R 10 152 | +R 168 |
| R 1 500 000 | R 14 976 | R 15 228 | +R 253 |
| R 2 500 000 | R 24 959 | R 25 381 | +R 421 |
These are estimates at prime with no margin — your actual rate may be prime plus or minus a margin depending on your bank, deposit and credit profile. To run the same numbers at your own bond size, term and rate margin, use the rate increase impact calculator.
Why the committee hiked
Headline inflation stood at 4.4% at the time of the decision. The committee pointed to fuel prices rising again after moderating between June and August, and to elevated services inflation, and said it was adopting a more restrictive monetary policy stance to prevent second-round effects from feeding into wages and prices — against what it described as an adverse global environment. In plain terms: the committee would rather act now, by a modest 25 basis points, than risk a longer tightening cycle later.
Taken together, 2026 has now delivered two 25 basis point increases — May and September — around a July hold. Against April, that is roughly R 504 more per month on a R1.5 million bond over 20 years: about R 6 045 a year.
What it means for buyers
The hike also shrinks what the same budget can finance. A R15,000 monthly instalment over 20 years supported about R 1 502 434 of borrowing at 10.50%; at 10.75% it supports about R 1 477 499 — roughly R 24 935 less house for the same money. If you are mid-purchase, getting pre-approved against the new rate beats discovering the gap after signing an offer to purchase.
What happens next
Banks typically adjust their prime rates within a day or two of a decision, and the change takes effect from 25 September 2026. The MPC's next scheduled announcement is 19 November 2026; its statement will be watched for whether this is a single adjustment or the start of a sequence — nothing about that direction is guaranteed, and this article is not a forecast. In the meantime, check what your repayment becomes at 10.75% with our bond repayment calculator, and if the new instalment is tight, our rate increase impact calculator shows what a further move would cost.
(Last updated 23 September 2026. Rate figures verified against the SARB September 2026 MPC statement listed below. Repayment examples: 20-year term at prime, no margin — your actual rate may be prime plus or minus a margin.)