Homeowners currently holding a R1.5 million ($79k) bond in South Africa are paying an additional R4,627 ($244) toward their bond repayment per month, compared to September 2021 (when the prime interest rate was 7%).

Breaking down what this represents as a portion of the average South African’s income:

• The average house price in South Africa for Q4 2022 stood at R1,422,992 (Oobarometer data).

• The average nominal take-home pay for April 2023 was R14,534 (BankservAfrica data)

So, this additional R4,627 increase in monthly bond payments represents 32% of the average South African’s monthly salary.

And homeowners are now spending 39% more on their monthly mortgage payments.

Driving this upsurge, The South African Reserve Bank (SARB) made headlines by announcing a 50 basis point hike to the interest rates, pushing the current prime lending rate from 11.25% to 11.75%.

Looking ahead, managing debt is going to be a growing challenge for South African homeowners.