What the repo rate increase means for your bond
**The Reserve Bank raised the repo rate by 25 basis points to 7.25% on 23 September 2026, effective 25 September. Prime moved from 10.50% to 10.75%. Bond repayments linked to prime rise automatically, without the lender needing to notify the borrower first.**
The decision was unanimous across the six-member Monetary Policy Committee, in contrast to the 4ÔÇô2 split at the July meeting when the rate was held.
Governor Lesetja Kganyago pointed to global shocks ÔÇö conflict-driven energy costs and supply chain pressure ÔÇö as the reason for moving.
Repo, prime, and the gap between them
The repo rate is what the Reserve Bank charges commercial banks to borrow from it. The prime lending rate is what banks charge their lowest-risk customers.
In South Africa prime sits at a fixed spread of 3.5 percentage points above the repo rate. That relationship has held for years, and it is why a 25 basis point repo move produces a 25 basis point prime move on the same day.
- Repo: 7.00%  7.25%
- Prime: 10.50%  10.75%
Most home loans are priced at prime plus or minus a margin negotiated at origination. If your rate was quoted as "prime less 0.5%", it moved from 10.00% to 10.25%.
How this reaches your repayment
A variable-rate bond tracks prime automatically. The lender recalculates the instalment and the higher amount is debited from the next cycle. There is no action required from the borrower and no agreement to sign.
The effect compounds with the term remaining. A rate change early in a 20-year bond has considerably more total impact than the same change with three years to run, because it applies to a much larger outstanding balance over a much longer period.
Your bank's own bond calculator, applied to your actual outstanding balance and remaining term, will give you the figure. A general rule of thumb will not.
Where inflation sits
The Reserve Bank targets inflation. As of November 2025 that target is a point target of 3%, with a tolerance band of plus or minus one percentage point ÔÇö replacing the 3% to 6% band that had stood for 25 years.
Headline consumer inflation for August 2026 came in at 4.4% year on year, up from 4.3% in July. Core inflation, which strips out food, non-alcoholic beverages, fuel and energy, also ran at 4.4%.
Both sit above the 3% target, though within the tolerance band.
The next decision
The Monetary Policy Committee meets six times a year. The remaining 2026 meeting is on 19 November. The 2027 schedule has not yet been published.
News24x7 does not give financial advice. Anyone deciding whether to fix a rate, restructure a bond or change a repayment should speak to a registered financial adviser.
Frequently asked questions
What is the repo rate in South Africa now?
7.25%, raised by 25 basis points on 23 September 2026 and effective from 25 September.
What is the prime lending rate?
10.75%, which is 3.5 percentage points above the repo rate.
When is the next interest rate decision?
19 November 2026, the last Monetary Policy Committee meeting of the year.
