There is welcome interest rate news in South Africa. On 20 November 2025, at the Monetary Policy Committee Meeting, the South African Reserve Bank (SARB) announced another rate cut of 25 basis points. The repo rate has lowered from 7.00% to 6.75% and the prime lending rate is now 10.25% – down from 10.50% (Source). This strategic decision was taken as inflation remains within the newly set 3% target framework.
Looking at the figures
The prime lending rate, which affects home loan repayments and other loans, is at its lowest level since halfway through 2023. The recent cut comes after two consecutive holds in March and September of 2025. This interest rate outcome is great news for property investors!
News on inflation and interest rates in South Africa: The rate-cutting cycle from 2024 – 2025
The financial easing cycle started in September 2024, when the repo rate had peaked at 8.25%. This was the highest interest rate seen in 15 years, and was kept for over a year. (Source)
The interest rate fluctuations reveal a stop-start approach:
September 2024: Interest rate cut of 25bp to 8.00% (the first cut in four years)
November 2024: Interest rate cut of 25bp to 7.75%
January 2025: Interest rate cut of 25bp to 7.50%
March 2025: Interest rate HELD at 7.50% (due to global tariff uncertainties)
May 2025: Interest rate cut of 25bp to 7.25% (easing was resumed)
July 2025: Interest rate cut of 25bp to 7.00%
September 2025: Interest rate HELD at 7.00% (second hold)
November 2025: Interest rate cut of 25bp to 6.75%
What were the patterns since September 2024?
Since the interest rate cut cycle started 14 months ago, the SARB has accounted for 150 basis points of accumulated cuts (or 1.5 percentage points). This brings down the rate from an 8.25% high to the current rate of 6.75%. This interest rate outcome is welcomed among those who were unsure if there would rather be a hold than a cut. (Source)
The 20 November interest rate cut was based on inflation fluctuation data. The October Consumer Price Index was at 3.6%. This is a bit above the SARB’s new target of 3% inflation, however, well within the range of 3-6%.
Inflation target and the decision-making process by the MPC
The most recent interest rate cut was made alongside certain policy reforms. Finance Minister Enoch Godongwana lowered the target inflation rate to 3% as stated in his October Medium-Term Budget Policy Statement. This is reduced from the former 4.5% midpoint guideline within the 3-6% range. (Source) This made concrete what the SARB had been pursuing.
The SARB expects headline inflation to average 3.4% in 2025 and 3.6% in 2026 before returning to 3% in 2027. (Source) This inflation outlook, coupled with a stronger rand and reduced oil prices, created legroom for the 20 November 2025 interest rate cut. (Source)
Global and local economic factors affecting the MPC meeting
The recent MPC meeting was held amid a rather complex economy. South African inflation levels have remained within the target range, yet the global economy is bringing about certain challenges. The latest interest rate news in South Africa is a positive outcome for all bond holders, including IGrow investors.
The South African economy has been resilient in 2025, despite international upheavals, with GDP growth of 0.8% in Q2. This resulted in the SARB revising its 2025 growth forecast up to 1.2%, even though we have seen worsened export potential with the advent of US tariffs. The rand has shown its strength in a time of turmoil. A lack of loadshedding throughout the majority of 2024 and 2025 has stimulated economic activity and a boost in overall activity.
The SARB’s September analysis and forecast took into account electricity tariff price inflation of almost 8%, higher than the previous expectation of 6%, after NERSA’s pricing correction. (Source)
The implications of the recent interest rate cut
The recent MPC decision and interest rate cut came into being with members heading into the meeting with divided expectations. As we mentioned before the MPC meeting, South African economic analysts were divided on their prediction on whether there would be a cut or hold. View our informative forecast post on these predictions.
What does 2026 look like?
“The cut of 25 basis points in the interest rate announced on Thursday puts about R168 per RI million owed on a bond back in homeowners’ pockets. While this may not feel substantial, the cumulative saving on the down payment of a R1-million bond since September 2024 now amounts to R1 021.” (Source)
Local economists expect that the SARB will remain cautious in 2026. Forecasts anticipate an additional one or two 25 basis point cuts in the first half of 2026, potentially reducing the repo rate to 6.25-6.50%. Then the SARB may pause interest rate cuts as it assesses inflation and economic growth.
Key takeaways
The next SARB MPC meeting is set for late January 2026. It is then that the MPC will assess inflation levels and whether they are trending towards the 3% target. These factors will influence whether pauses or cuts are on the horizon for 2026.
What does this mean for you?
At IGrow, we have consistently seen investment interest from both new and seasoned investors. Many IGrow investors have expanded their portfolios in 2025, secured top deals, and benefited from the stabilising economic climate. With the new interest rate cut further enhancing affordability, more of our investors are entering 2026 with even greater confidence.
1. Greater Affordability
A reduced interest rate lowers your home loan repayments, monthly. This is a relief for any investor.
2. Improved Cash Flow and ROI are a given
Should you own one buy-to-let property or a property portfolio, you will see better cash flow and Return on Investment. This improves your portfolio scalability and options to reinvest or grow your property portfolio.
3. Experience improved confidence
The property market dynamics in South Africa, given the recent interest rate cut news, are in your favour. Property demand is likely to be boosted benefiting IGrow investors on the whole.
4. Your investment timing is aligned for growth
This is the ideal time to review your current property portfolio to determine whether you should refinance and access equity from your investment properties. A beneficial interest rate outcome usually preempts the start of an upward cycle for the property sector. This is fantastic news for the IGrow team and our clients.
Book a free consultation with an IGrow investment strategist today to assess your current property portfolio structuring as 2026 approaches.
