Repo rate and prime rate explained
The repo rate is set by the Reserve Bank, and almost every variable home loan, car loan and credit card in South Africa follows it through the prime lending rate.
What the repo rate is
The repo rate is the interest rate at which the South African Reserve Bank (SARB) lends money to commercial banks. Its Monetary Policy Committee (MPC) meets six times a year and can raise the rate, cut it or leave it unchanged. Raising it makes borrowing more expensive, which cools spending and helps bring inflation down; cutting it does the opposite.
How prime follows repo
Banks set their prime lending rate at the repo rate plus 3.5 percentage points, and they change it on the day after an MPC decision. In September 2026 the repo rate was raised to 7.25%, which took prime to 10.75%. Your own rate is quoted relative to prime, for example “prime minus 0.5%” or “prime plus 2%”, depending on your credit record, deposit and the bank’s offer. When prime moves, a variable rate moves by exactly the same amount.
What a 0.25% change costs
A quarter of a percentage point sounds small, but on a large, long loan it adds up. The table shows the monthly repayment on a 20-year home loan before and after a 0.25% increase.
| Loan amount | At 10.50% | At 10.75% | Extra each 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 2 000 000 | R 19 968 | R 20 305 | R 337 |
Over 20 years, the extra R 253 a month on a R 1,5 million bond is about R 60 000 more in interest. Cuts work the same way in reverse.
Fixed rates and other loans
If your rate is fixed, it does not change with repo until the fixed period ends. Credit cards, overdrafts, store accounts and most personal loans are also priced off prime, although the National Credit Act sets a maximum rate for each type of credit. Interest you earn on savings and notice deposits usually moves when repo moves too.
Frequently asked questions
When does a rate change show in my repayment?
Prime changes the day after the MPC announcement. Your bank applies the new rate to interest from that date, and the debit order usually changes from the next month.
Should I keep paying the old, higher amount after a cut?
If you can, yes. The extra goes straight to the capital, which shortens the loan and saves interest. The bond extra payment calculator shows how much.
Why is my rate different from prime?
Banks price each loan for its risk. A bigger deposit, a strong credit record and a regular income usually earn a rate below prime; a higher risk means a rate above it.
Related calculators
Interest Rate Change Calculator
See how much your bond or loan repayment changes when interest rates move up or down.
Open calculator →CALCULATORHome Loan Repayment Calculator
Estimate monthly bond repayments, the amount financed and total interest for a property purchase.
Open calculator →CALCULATORBond Extra Payment Calculator
Estimate how paying extra each month could change your remaining loan term and interest.
Open calculator →Repo and prime rates from the South African Reserve Bank MPC statements and the banks’ published prime rates. Repayments assume a 240-month loan with interest charged monthly. Checked 16 October 2026; rates change at every MPC meeting.