Start with your contract, not the headline
The SARB’s policy rate influences other interest rates in the economy. The effect on your payments depends on your agreement: a linked variable rate may change, while a fixed rate can stay unchanged for its agreed period. Check your lender’s notice and the contract before changing a debit-order amount in your budget.
A rate announcement is not a new loan quotation. Your actual rate can include an agreed margin, and the effective date matters. Keep a record of the previous rate, the replacement rate and the first payment affected. If a notice is unclear, ask the lender for the revised schedule.
Percentage points are different from percentages
Moving from 11% to 11.5% is an increase of 0.5 percentage points, also called 50 basis points. It does not mean your monthly instalment rises by 0.5%. The payment depends on the balance, remaining term and calculation method as well as the interest rate.
Keep the same balance and remaining term when comparing two rates. Otherwise you can mistake a change caused by a different loan size or duration for the effect of the rate itself. Add fees and insurance separately when working out the cash leaving your account.
Use what is left on the loan
For an existing loan, use the outstanding balance and remaining months rather than the original purchase price and original term. A lender statement or settlement information can help establish those inputs. A monthly fixed-rate calculator gives an estimate; actual daily interest and lender-specific adjustments may produce a different amount.
For vehicle finance, check the remaining balloon as well as the regular instalment. For a home budget, include rates, levies, insurance and maintenance. A repayment that fits by itself can still leave the wider household plan short.
Decide how the cash difference will be used
If the revised repayment is higher, update the budget from its effective date and identify where the extra cash will come from. If it is lower, compare options such as rebuilding a buffer, funding a known bill or making an additional debt payment under the lender’s terms. A lower payment does not require a new spending commitment.
Check deposit-rate changes too. Interest received can move differently from interest charged, and products have their own terms. Keep these comparisons as scenarios rather than predictions about the next announcement. This guide explains how to review a change; it does not state a current policy rate or forecast a future one.
Sources & further reading
Educational information, not personalised financial advice. This guide was prepared for this release. Read our editorial and corrections policy.