Interest Rates
Buying a home in South Africa is one of the most significant financial decisions many people make. Whether you’re a first-time buyer or a seasoned homeowner, your mortgage (also known locally as a home loan) is likely to be your largest long-term debt. Understanding how mortgage interest works — and how to pay less of it — can help you save hundreds of thousands of rand over time.
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When most South Africans apply for a home loan, they're told the basics: improve your credit score, keep your debt-to-income ratio low, and ensure you can afford the repayments. But what happens behind the scenes once your application hits a bank’s credit risk engine is far more complex — and it's grounded in advanced statistical analysis, predictive modeling, and geographic risk profiling.
This article explores how banks in South Africa assess home loan applications through a lens of statistical risk mitigation, going beyond the surface-level criteria and into the data-driven processes used to manage exposure to default.
The National Credit Act (“NCA”) of 2005 is a law designed to regulate the consumer credit market in South Africa. It aims to promote a fair and accessible credit environment, protect consumers, and encourage responsible credit practices. How does that shape the landscape for consumers?
There are many different types of loans and methods of calculating and repaying interest. Your home loan is quite possibly the longest loan commitment you will make, so it’s critical to understand how the interest is calculated over the life of the loan, and what each repayment is actually made up of.
The prime rate has decreased three times by 25 basis points since September 2024, bringing the current prime rate down to 11%, which is good news for homebuyers. But why is it taking so long for the market to respond?
What is inflation? What is the role of the Monetary Policy Committee (MPC)? How do interest rates influence inflation?
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