The South African Reserve Bank has announced that interest rates will once again remain unchanged, maintaining the prime lending rate at 11.75%. Unchanged inter- est rates have played an important role in rebuilding market confidence.
While ongoing economic pressure contin- ues to affect buyers’ affordability, Leonard Kondowe, National Manager at Rawson Finance, says lenders remain eager for qualified home finance applicants. “Applicants with pristine financial profiles can look forward to some very favourable home loan offers,” he says. “Lenders are pulling out all the stops to incentivise low risk bondholders to join their port- folios. The higher an applicant’s risk pro- file, the higher the interest rate lenders will require them to pay – assuming they are willing to take on the risk at all,” says Kondowe. “Taking the time to address outstanding debt, minimise expenses and save for a reasonable deposit can have a very real effect on your eventual bond offer, and the total interest you’ll end up paying over the lifetime of your mortgage loan.” As for how the property market responds to the interest rate announcement, Kondowe remains positive.
“With cuts still on the horizon, we expect property activity to continue increasing steadily. Cash buyers
will still remain active, as will those with more re- silient finances able to weather a few months of their high repayments in or- der to benefit from advantageous prop- erty prices and the future interest rate decline. As for first-time buyers, it will be beneficial for them to get a pre-qual- ification before they enter the property market so they know exactly what they can afford and plan their finances ac-
cordingly. “
“We are confident that the interest rate will come down in future, but we are not certain when it will happen or by how much,” he says. “Instead of relying on what might come, focus on finding a property with good long-term equity growth potential, and building the finan- cial resilience to handle any unforeseen bumps in the road.”
