Absa, First National Bank, Nedbank, Old Mutual and People’s Bank announced they would drop their prime lending rates by one percentage point after the South African Reserve Bank (SARB) announced on Thursday it would cut the repo rate.
Absa said it would cut its prime rate from 15,5% to 14,5% percent for new business from Friday and for existing business from Monday.
FNB said the new rate of 14,5% would be effective from Friday for new and existing homeloans.
Combined with a cut of 1,5% in June, interest rates have come down 2,5% in the past two months.
“The impact of the two rate cuts means that a person with a homeloan of R100 000 has seen repayments come down by R187 a month, with the prospect of more rates cuts to come,” FNB chief executive Viv Bartlett said in a statement.
A spokesperson for Nedbank, People’s Bank and Old Mutual said these institutions would also decrease their prime lending rate by a percent to 14,5%.
The SARB’s monetary policy committee announced on Thursday after a two-day meeting in Pretoria that it would cut the repo rate — the rate at which it lends money to commercial banks — from 12% to 11%. — Sapa
SARB cuts repo rate to 11%