Increase in Mortgage Rates expected

Borrow at your own risk say experts
Home Loan Tips

Mortage RatesMost economists are predicting that interest rates will be increased, after the Reserve Bank governor Tito Mboweni meets will delegates in a couple of weeks.

An increase in interest rates could spark an alarm in the Home Loans market where currently Banks have been marking new records in home loan applications.

With rates at its lowest for more than twenty years, experts are warning that if the interest rates are increased by more than one percentage point, many new home owners could struggle to keep up with the extra bond costs.

Speaking to Moneyweb.co.za, property economist Francois Viruly explained that borrowers should ensure that they’re able to afford a rate increase of three percentage points before signing a home loan.

A half percentage point increase in the mortgage rate would push up the monthly payments on a 20year R1million home loan by R338 per month. And a full percentage point increase would see an increase of R683 in the monthly repayments.

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