South Africa Raises Repo Rate to 7.25 Percent, Lifting Prime to 10.75 Percent

The South African Reserve Bank raised its repurchase rate by 25 basis points to 7.25 percent on 23 September 2026, taking the prime lending rate to 10.75 percent from 10.50 percent. The decision was unanimous and the new rate took effect on 25 September.

What it means for a foreign buyer

The repo rate and the rule that caps your mortgage are set by the same institution, and that is what makes this decision bite harder for a non-resident than the headline suggests. Exchange Control Regulation 3(1)(f), enforced by the Reserve Bank's Financial Surveillance Department, limits non-resident mortgage lending to roughly 50 percent of the purchase price. You bring the other half in cash from offshore. That half you do finance locally is now priced off a 10.75 percent prime rate, and South African home loans are overwhelmingly variable, so the increase reaches existing bonds immediately rather than only new ones. On a R2 million bond, Jawitz Properties puts the increase at about R335 a month. A non-resident buying at R4 million and financing the maximum permitted half is carrying exactly that.

If you hold a South African work visa the 50 percent cap does not apply, so you can borrow on standard local terms and are exposed to the full prime move on a much larger loan. Check which category you fall into before modelling the repayment, because the two produce very different numbers on the same property. If you are buying with offshore cash and no local debt, this decision does not change your cost and may work in your favour: sellers carrying higher costs on their own bonds tend to negotiate.

The rate is unlikely to be the peak of a long cycle, but it is not obviously the end of one either.

What changed

The repo rate moves from 7.00 percent to 7.25 percent. Prime, which is the rate most South African mortgages are quoted against, moves from 10.50 percent to 10.75 percent. The Monetary Policy Committee was unanimous, a notable shift from July, when it held at 7.00 percent on a split four-to-two vote.

The repayment effect has been quantified by several lenders and agencies. Property24 and Jawitz Properties put the increase at about R168 a month on a R1 million bond, R335 on R2 million and R500 on R3 million. Independent Online published a slightly different set covering other loan sizes: R135 a month on R800,000, R253 on R1.5 million and R505 on R3 million.

The mechanism

Two separate Reserve Bank functions are in play. The Monetary Policy Committee sets the repo rate, and commercial banks price prime off it. Separately, the Financial Surveillance Department administers exchange control, and Regulation 3(1)(f) caps local borrowing by non-residents at around half the purchase price. That is a binding regulatory requirement rather than a policy each bank chooses, which is why the cap barely varies between institutions and why shopping around will not move it.