How much will you pay on a R500 000 and R1 000 000 home loan in South Africa?
Before applying for a loan to buy a property it is helpful to understand some of the main factors that determine the financial implications for you.
The main determining factors are:
The South African Repro Interest rate.
So what exactly is the Repro Rate? The South African Reserve Bank (SARB) determines the Repro Interest rate which is the rate at which the SARB will lend funds to Commercial Banks. The current Repro Rate is 5.90%
The Prime Lending Rate.
The prime lending rate is the repo rate plus what the banks add on in order to make a profit. So these two interest rates will affect the interest rate of your home loan. As of May 2022, the prime lending rate in South Africa is 8.25%. It was increased by 0.25% in November 2021, and by another 0.25% in January 2022.
What do changes in these two factors mean for your home loan?
Following the latest interest rate hikes, a R100 000 home loan with a term of 20 years could now cost approximately R1 740 081 with monthly repayments of R7 250.
Below is a rough guide for home loans between R500 000 and R1 000 000 (2 higher amounts are included for comparison.)
Your Credit Rating will affect how much you will pay for a home loan of between R500 000 and R1 000 000.
It is a significant factor as it is based on your credit record, which is affected by things such as your level of debt, and how timeously you pay your bills. Anything above 670 is considered an excellent credit score, and is likely to earn you lower interest rates.
Your Deposit
The size of your deposit will also affect your interest rates. The higher the deposit, the less risk to the bank, and therefore lower monthly repayments and interest rates.
Your choice of bank for a home loan of R500 000 or R1 000 000.
As well as the prime interest rate, your financial situation will affect the interest rate that the bank charges on your home loan.
The interest rate on a home loan will vary depending on what the bank is willing to offer, and how good your Credit Rating is. Different banks offer different packages and some of the Banks may offer lower interest rates than others. So by submitting your home loan application to multiple banks you could compare deals offered by the Banks and choose the one with the most favourable deal that suits your needs.
A good start to finding out how much you will pay on a R500 000 or a R1 0000 000 home loan in South Africa is to use a Bond Calculator.
So try our Bond Repayment Calculator given below.
| Bond amount | Monthly payment on 20-year bond (no deposit) |
| R500 000 | R 3 945 |
| R750 000 | R 5 884 |
| R1 000 000 | R 7 822 |
| R1 500 000 | R 11 698 |
| R2 000 000 | R 5 575 |
Home Loan Calculators
Home Load Calculators – read more here
Monarch Property Advice and Articles
How does a second bond work in South Africa
In South Africa, a second bond lets you access cash based on your home’s equity (current value minus outstanding mortgage). It offers good interest rates for home upgrades or debt clearing, but increases monthly payments. Be aware of potential property value decline and extra costs like registration fees. Seek professional advice before taking this step.
Read more online here : How does a second bond work
Bond Calculator South Africa
Get home finance smart with our South African Bond Calculator.
Calculate:
- Deposits
- Monthly repayments
- Bond & transfer costs
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