SARB Hikes to 7.25%: What the September 2026 Rate Hike Costs Your Bond
The South African Reserve Bank raised its repo rate by 25 basis points on 23 September 2026. The repo rate moves from 7.00% to 7.25% and the prime lending rate rises from 10.5% to 10.75%, effective Friday 25 September.
It is the second hike of 2026, after May. And unlike July, when the committee split 4-2 to hold, this decision was unanimous: all six Monetary Policy Committee members voted to hike.
New rates from 25 September 2026
| Rate | Before | After | Change |
|---|---|---|---|
| Repo rate | 7.00% | 7.25% | +25 bps |
| Prime lending rate | 10.5% | 10.75% | +25 bps |
Prime is always set at repo plus 3.5 percentage points, so every variable-rate home loan, vehicle loan and credit facility linked to prime moves by the same 25 basis points.
Why the SARB hiked
On the surface, inflation had been easing. CPI dropped from 5.0% in June to 4.3% in July and 4.4% in August, helped by food inflation at its lowest level since 2010.
The MPC looked past that. Governor Lesetja Kganyago pointed to fuel: petrol and diesel prices, which had moderated between June and August, are rising again as conflict in the Middle East disrupts global oil supply. The SARB now expects headline inflation to climb above 5% later this year and into early 2027 before returning to the 3% target by the end of 2027.
Two things made the SARB less willing to wait than it was in July:
- The target is now 3%, not 4.5%. Since November 2025 the SARB has targeted 3% with a 1 percentage point tolerance band. Inflation at 5% sits outside that band, not comfortably inside it as it would have under the old 3-6% range.
- Expectations are still too high. Longer-run inflation expectations are sitting around 4%, well above the target. The committee’s concern is that a second fuel shock gets built into wage deals and price setting.
“It is crucial that inflation reverts to 3% as the current shock fades, and we take responsibility for delivering that outcome,” Kganyago said.
The SARB also cut its 2026 growth forecast from 1.4% to 1.2%. Hiking into weak growth shows how seriously it takes the inflation risk.
What it costs your home loan
The increase flows into your instalment from your next billing cycle. On a standard 20-year bond at prime:
| Bond amount | Payment at 10.5% | Payment at 10.75% | Monthly increase | Extra per year |
|---|---|---|---|---|
| R750,000 | R7,488 | R7,614 | +R126 | +R1,516 |
| R1,000,000 | R9,984 | R10,152 | +R168 | +R2,022 |
| R1,500,000 | R14,976 | R15,228 | +R253 | +R3,033 |
| R2,000,000 | R19,968 | R20,305 | +R337 | +R4,044 |
| R2,500,000 | R24,959 | R25,381 | +R421 | +R5,055 |
| R3,000,000 | R29,951 | R30,457 | +R505 | +R6,066 |
Based on a 20-year bond at prime with no margin. If your rate is prime plus or minus a margin, your figures will differ. Run your own balance in the Bond Repayment Calculator, which now defaults to 10.75%.
Both 2026 hikes together
Prime was 10.25% in April. Two hikes later, the cumulative cost is 50 basis points:
| Bond amount | Payment at 10.25% (April) | Payment at 10.75% (now) | Monthly increase | Extra per year |
|---|---|---|---|---|
| R750,000 | R7,362 | R7,614 | +R252 | +R3,023 |
| R1,000,000 | R9,816 | R10,152 | +R336 | +R4,030 |
| R1,500,000 | R14,725 | R15,228 | +R504 | +R6,045 |
| R2,000,000 | R19,633 | R20,305 | +R672 | +R8,061 |
| R2,500,000 | R24,541 | R25,381 | +R840 | +R10,076 |
| R3,000,000 | R29,449 | R30,457 | +R1,008 | +R12,091 |
For a household carrying a R1,500,000 bond, that is roughly R500 a month more than six months ago, before any change in fuel, electricity or food costs.
What it does to how much you can borrow
For buyers, higher rates matter in a second way: they shrink the bond a bank will approve. South African banks generally cap the repayment at about 30% of gross monthly income. At that limit, over 20 years:
| Gross monthly income | Max bond at 10.25% (April) | Max bond at 10.5% | Max bond at 10.75% (now) |
|---|---|---|---|
| R30,000 | R916,830 | R901,460 | R886,500 |
| R50,000 | R1,528,050 | R1,502,434 | R1,477,499 |
| R80,000 | R2,444,880 | R2,403,895 | R2,363,999 |
A household earning R50,000 a month can borrow about R50,000 less than it could in April. If you were pre-approved before 25 September, check whether your approval still holds at the new rate before you sign an offer to purchase.
The Bond Affordability Calculator uses the current prime rate and factors in your existing debt.
What to do now
Check your debit order. Your bank will recalculate your instalment from the next billing cycle. If your debit order is a fixed amount you set yourself, make sure it still covers the new instalment.
Put spare cash into your bond. At 10.75%, every rand in your bond or access bond “earns” a 10.75% return in interest you do not pay, and it is tax-free. Very few savings products come close after tax. The Access Bond Calculator compares this against a savings account and investing. The Extra Payment Calculator shows how much interest and time a regular extra payment saves.
Recheck buy-to-let numbers. If you own or are buying a rental property, the cost of borrowing just went up again. The Rental Yield Calculator compares your net yield against the new prime rate.
Do not panic-fix your rate. Banks price fixed rates at a premium, and that premium already bakes in expected increases. With the SARB signalling a pause and eventual cuts once inflation settles, locking in now could mean paying above-market rates for years. If you are considering it, ask your bank for the exact premium first.
File your tax return. Non-provisional taxpayers have until 23 October 2026. If SARS owes you a refund, it helps with the higher instalment. See our SARS filing season 2026 guide.
What happens next
The SARB’s projection model points to the repo rate holding broadly stable for the rest of 2026, with cuts only once inflation moves sustainably back toward 3%. The last MPC meeting of the year is on 19 November 2026, with the decision announced at about 15:00 SAST.
The main risks to that outlook are the oil price and the rand. The Governor noted that the rand has held up well, which has helped contain import prices. A sharp weakening, or another leg up in fuel prices, would put November back in play.
For the full sequence of decisions since 2010, see our SA prime interest rate history. For the build-up to this decision, see Will the SARB hike again in September 2026?