On 14 April 2020, the Monetary Policy Committee, announced a further 100bps decrease in the repo rate, reducing it to an all-time low of just 4,25%, the lowest since 1973.
The extensive collective cut in interest rates this year, totaling 225 bps, offers much needed relief to homeowners and indebted households. Although this will not restore equilibrium on the effects of a loss of income, the latest cut will most certainly offer some relief to existing mortgagees as well as prospective buyers seeking finance for a new home. This, in turn, will ease the way for recovery once restrictions are alleviated and economic activity begins to recover.
After the announcement on 17 April by the Government of the gradual easing of restrictions and opening of certain sectors in business, it is hoped that the Deeds Office will be operational shortly to tend to the registration of transfers on transactions concluded prior to lockdown. Not only will this prevent a backlog once business is back to the new normal, but it also provides much needed relief to sellers being severely affected in the challenging economic climate.
The restriction on operations at the Deeds Office, and subsequent loss of revenue from transfer duty to SARS, will be an important deciding factor in partial (or complete) reinstation of registrations of transactions.
The other side of the coin offers a very attractive opportunity for prospective buyers to get the process started through our agents, ensuring the full benefit of the reduced repo rate. Putting all these percentages into a Rand-value just makes more sense, especially if a prospective buyer is still indecisive. The total interest saving on a R3 million bond, taking into consideration the lower repo rate, amounts to R1 037 326 with a monthly saving of R4 323 on the repayment (data supplied by Naviga).
Contact our agents for more information:
072 644 4955