• Rate Cut Benefits : The 25-basis-point reduction to 11.25 % offers homeowners the chance to reduce debt and save on interest over time .
• Advice for Homeowners : Increase monthly bond repayments or use lump sums to pay off debt faster , reducing overall loan balance and interest .
• Property Market Impact : Lower borrowing costs improve affordability , boosting property ownership opportunities for renters and encouraging investors to expand portfolios .
FINANCE
Understanding the Impact of the Rate Cut The primary reason behind the SARB ’ s decision to lower interest rates is to manage inflation and boost consumer confidence .
• Rate Cut Benefits : The 25-basis-point reduction to 11.25 % offers homeowners the chance to reduce debt and save on interest over time .
• Advice for Homeowners : Increase monthly bond repayments or use lump sums to pay off debt faster , reducing overall loan balance and interest .
• Property Market Impact : Lower borrowing costs improve affordability , boosting property ownership opportunities for renters and encouraging investors to expand portfolios .
According to Leonard Kondowe , National Manager at Rawson Finance , “ Inflation has been within the SARB ’ s target range , and global market conditions are contributing to cautious optimism .” However , Kondowe also advises caution , noting that the cut aligns with global trends , particularly in the US , where economic conditions have led to lower interest rates .
For homeowners , the immediate effect is a reduction in monthly bond repayments , providing some financial relief . As Kondowe explains , “ While this decrease is relatively small , it has a compound effect over time , especially when used strategically to reduce debt .”
64 REI MAGAZINE DECEMBER 2024 / JANUARY 2025