Fixed rates

Reserve Bank governor Tito Mboweni has mooted the possibility of introducing a second fixed interest rate for home buyers as property ownership levels in South Africa are low and the volatility in interest rates makes it difficult for people to buy a first home. T-Sec economist says, It is a good idea if implemented with proper systems." But he warned that consumers might be tempted to abuse cheaper finance to fund other items, such as new cars and restaurant meals.

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The Standard Bank says it would welcome discussions on a fixed interest rate, while ABSAsays it would need additional information from the Reserve Bank for it to be able to ascertain the merits of the proposed system. Very few South Africans have a fixed interest rate, and Francois Van Wyk of Cadiz Specialised Asset Management cautioned that a fixed rate should not come at the expense of banks.

Mboweni moots fixed mortgage rate and Banks ask for clarity on mooted fixed-rate loans