The average South African homeowner paying R7,680 more a year on their bond

The average South African homebuyer is paying R7,680 more a year on their bond than a year ago, as house prices have risen 4.2% and the prime lending rate remains unchanged at 10.50%.

The latest research by eXp Realty South Africa has shown that the estimated average monthly cost of a home loan has increased by 4.2% over the last year.

The rise was driven entirely by house price growth, given that borrowing costs are at exactly the same level as 12 months ago.

eXp Realty South Africa examined the average property price, the home loan required with a 10% deposit, the prevailing prime lending rate, and the resulting monthly bond repayment.

It compared each measure with the same point in 2025 to assess how buyer affordability has changed over the past 12 months.

The research showed that the average South African home now costs R1.77 million, up 4.2% over the last year.

As a result, the average 10% deposit now stands at R176,680. This means that buyers require an average home loan of R1.59 million.

Unlike many other markets, borrowing costs have offered no relief. The prime lending rate currently stands at 10.50%, exactly where it stood a year ago.

The South African Reserve Bank cut the repo rate in November 2025, bringing the prime rate to 10.25%.

However, that reduction was reversed in May 2026, leaving buyers facing the same borrowing cost as a year ago.

As a result, the estimated average monthly bond repayment now stands at R15,875, up from R15,236 in August 2025.

This represents an increase of 4.2%, equating to an additional R640 per month, or R7,680 per year, for the average South African homebuyer.

South Africans homebuyers face an affordability problem

eXp Realty South Africa Country Leader Andrew Thompson pointed out that house prices have continued to grow at a healthy pace over the last year.

He said this is a positive signal of the South African market’s underlying strength.

“But with interest rates unchanged, there has been nothing to soften the impact on buyers,” Thompson cautioned.

“Every rand of that price growth has flowed straight through to the monthly repayment, and with the Reserve Bank having reversed course in May, buyers are no longer able to plan around the expectation of falling rates.”

He said this dynamic naturally makes South Africans more considerate about what they buy and what they are willing to pay for it. Meanwhile, for sellers, this reinforces the fundamentals.

“Demand is clearly still there, with banks continuing to lend and approval rates holding up well, but buyers who are absorbing a higher monthly commitment will scrutinise value far more closely,” he said.

“Pricing a home accurately from day one, presenting it properly and marketing it effectively are what separate the homes that sell from the homes that sit.”

MultiNET Home Loans CEO Shaun Rademeyer explained that they are not seeing a lack of appetite among banks to lend, but rather increasing pressure on buyers’ monthly affordability.

“Banks remain competitive for good-quality home loan applications, but buyers are understandably becoming more price-sensitive when both property prices and their broader household expenses are increasing,” Rademeyer said.

He said the R640 monthly increase is also a good reminder that the interest rate South Africans secure on their home loan matters.

“On a bond of around R1.59 million, even a relatively small difference in the rate offered by competing banks can translate into meaningful savings over the life of the loan,” he said.

“This is why buyers should not look only at whether their home loan is approved. They should also look at which bank is giving them the best overall deal.”

Rademeyer stressed that comparing multiple banks and negotiating the interest rate can make a material difference to monthly affordability.

“We are also seeing buyers being more deliberate about what they can comfortably afford rather than simply focusing on the maximum amount a bank will approve,” he said.

“In the current environment, that is a sensible approach. A home should remain affordable not only on the day you buy it, but throughout the interest-rate cycle.”