Interest rate hikes are coming: economists

[BusinessTech]

Interest rate hikes are coming: economists

There is a growing risk that the South African Reserve Bank (SARB) could hike interest rates in November - but economists are still of the view that a hike cycle is only likely to be seen in Q1 2022.

 

[rvZA]

Well.... inflation actually just hit 5%. Real inflation is probably around 20%. Nonetheless, they will need to raise interest rates as soon as possible. The problem for them, however, either which way, the economy is going to end up getting hurt.

 

[The_MAC]

It was good while it lasted - glad we were able to resist the temptation of increasing our monthly spend

 

[Scooby_Doo]

All those new homeowners... Going to be some deals over the next year or so for those who have the means.

 

[rvZA]

All those new homeowners... Going to be some deals over the next year or so for those who have the means.

That is, if you have the appetite and risk tollerance to buy in SA while the government is threatening with and working hard at introducing EWC. Nonetheless, this will hurt a lot of consumers, especially those who still have jobs and are fighting hard for increases, bonuses and more just to keep head above water under difficult conditions.

 

[LCBXX]

So many people went and incurred debt when the interest rates were low whereas those who chose to save had to be content with low saving growth.

Tsk tsk.

 

[rvZA]

So many people went and incurred debt when the interest rates were low whereas those who chose to save had to be content with low saving growth.

Tsk tsk.

If those who incurred debt, like a property, settled on a fixed interest rate, they will be fine. Any other debt and you will soon be f***ked. Your repayments will become a lot more expensive.

 

[LCBXX]

If those who incurred debt, like a property, settled on a fixed interest rate, they will be fine. Any other debt and you will soon be f***ked. Your repayments will become a lot more expensive.

How many people do you know who've opted for a higher, fixed, interest rate?

 

[Napalm2880]

How many people do you know who've opted for a higher, fixed, interest rate?

None. Everyone I know that's got quotes has found it's significantly higher.

 

[LCBXX]

None. Everyone I know that's got quotes has found it's significantly higher.

Yup.

Tsk tsk.

 

[zerocool2009]

Please push rates up!!!! It was projected for Nov 2021 already

 

[ToxicBunny]

None. Everyone I know that's got quotes has found it's significantly higher.

The banks will model how they see interests rates playing out over a period of time (5 years or something) and the fixed interest rate offered will put them in precisely the same or better position than their modelled variable interest rate offering.

 

[LCBXX]

Please push rates up!!!! It was projected for Nov 2021 already

This will be done after the elections, alongside the ANC ruining December with lockdown BS and vaccine mandates, compounded by stage 2+ loadshedding.

Prepare for anger...

 

[Other Pineapple Smurf]

All those new homeowners... Going to be some deals over the next year or so for those who have the means.

Already starting to happen, so many new homeowners who bought second properties did not get the quick return they expected as they thought it was another property boom.

I rather used the opportunity to clear my debt quicker, saved a nice deposit and just bought an investment property that I can easily afford at rates of 30%. Banks were so quick to give full bonds as well.

This was the best time for people who made bad debt decisions like me, to recover from them and take advantage of the situation.

Cash will be King in 2022 with more bargains coming.

 

[WollieVerstege]

None. Everyone I know that's got quotes has found it's significantly higher.

That is why I always advise people to see what the higher payment is, if you can afford that now, just pay it now and keep you rate variable. The difference goes off against the capital owed rather than paying interest to the bank. By the time the variable rate matches the fixed rate you will already have a nice bit saved up in your bond.

 

[zerocool2009]

Sadly if you fix, your flexi falls away!

If you prepay it... you simulate a higher rate and save at the same time

 

[Dan C]

 

[B-1]

If we hit 20+ % repo rate again its going to be tough for a lot of people.

 

[zerocool2009]

If we hit 20+ % repo rate again its going to be tough for a lot of people.

The odds for that is very very slim. 9% would be good. Then people who save with investments would gain too

 

[zerocool2009]

I wonder sometimes and think, younger crowds buying with this low rates -> you are so spoilt!