15% Says Tito Mboweni

Contrary to popular belief and contrary to all SUPER UBER OOBA financial guru's in South Africa, the repo rate climbs to 11.5%. South Africa's home loan interest rates now hit a WHOPPING 15%.

Is it time to fix you interest rate??? My answer is yes. I don't believe it's going to drop anytime soon and I think fixing interest rates right now is the only option if you're feeling the brunt and starting to take financial strain.

Interest Rates Up Again?

Is it time again. Is South Africa going to feel the kick of another interest rate hike? More importantly can South Africans afford another interest rate hike? Well I'm please to announce that ABSA home loans have come to the foreground. They're now offering Home Loans @ fixed rates over 10 years. This is a new solution offered by ABSA and I think it's come just at the right time.

Read the ABSA Home Loans section and found out more about fixed rates!

NEWS FLASH: Interest Rates now 14%

Darn it's hard to believe that the interest rates on 2 years ago were sitting at an incredible rate of 10%. Every thought that with the new credit act in place, it would curb the amount of money that people were spending on credit and thus hopefully curb house hold spending and drop the CPIX rates.

Problem is, food prices are now increasing at almost an uncontrollable rate and South African's are feeling the pressure with the constant increase in interest rates.

Tito, what are we to do?

-3% Below Prime: Why not me?

THE BIG QUESTION?

HOW COME EVERYONE IS GETTING THIS FANTASTIC INTEREST RATE? AND I DON'T!!!!!!!

So generally speaking and as a general guideline - how do I get the rates I want?

Every deal is treated differently - Property, client, age, income, deposit etc. So just because your friend gets a rate of -2%...It does not mean you will.

GREAT RATES: -3% below prime - BUT you need to be a staff member of the bank.

VERY GOOD RATES: -2.0 to -2.3% below prime - BUT you need to have well conducted bank accounts, a solid deposit of 20% and more. A larger bond requirement, R 1,500,000.00 and more. Private bank clients. Not many people get this sort of rate concession.

GOOD RATE: -1.35% to -1.95% below prime - REQUIRES you to have well conducted bank accounts (watch those bounced Debit orders), have money for your own costs, preferably be a second time buyer and use your own bank.

WORKABLE RATE: Prime to -1.35% - AS long as you are not a first time buyer wanting costs included (Attorney fees) in the home loan. This is the one that you can always work on to improve as time goes by.

PRIME: Often for first timers who have costs included and even when they have bank rate concessions (Better rates) this only comes into play when you have paid off your costs or your property price has increased.

TOUGH RATE: Anything above prime - GENERALLY this is when exposure is high, or risk is high FOR the BANK of course. Most times you will take it because you have no choice.

FIXED or VARIABLE - What's the difference?

Variable rate is a rate that moves up when interest rates go up and down when they go down.  So if you have a rate of -1% below prime or 11,5% when the interest rate is 12,5%, then when the rates go to 11,5%(I hope the reserve bank is listening) then your rate will go down to 10,5%.

Fixed Rate is usually quoted for periods of 12 to 24 months and are usually pegged at approximately the same or more than the current interest rate.  Usually more!!!!!

HOW TO IMPROVE MY EXISTING INTEREST RATE?

1. Pay a little more on your monthly payment (Say for 6 months)
2. Go to your branch and show them you are paying more, get a better rate
3. Then repeat this every 6 months

 

SURPRISE YOURSELF...its that simple and the banks love good customers and do reward them.