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Interest Rates

Current Interest Rate

The Prime Lending Rate is currently 8.5% as of July 2012.

What is Interest:

Interest is a fee that is paid when you borrow money, and is calculated on a yearly basis. Generally it is always expressed in a percentage amount through the term of the loan.

To keep it really simple

If you borrow R 100 000.00 at an Interest rate of 13% per annum, you will pay R 13 000.00 interest if the loan period was for 1 year.

On a typical loan the repayment and interest is due monthly so to pay of R 100 000.00 you would have 12 repayments of R 9416.667 to clear the loan.


Loan R 100 000.00
Interest R 13 000.00

Total R 113 000.00

Divided By 12

Equals R 9416.667

This all sounds really simple but it doesn’t work like this because the interest is calculated on the balance of the loan at the end of every month. So the actual interest on R 100 000.00 over a year would be R 7180.76 with the monthly repayments being R 8931.73.

Long Term Loans

This gets a little more complicated and the use of a loan or home loan calculator is recommended when working out long term loans, links to all the banks calculators can be found in our Homeloans Tip section.

But to sum it up the repayments on a long term loan are far less.


Loan – R 100 000.00
Interest – 13%
Loan Period – 20 Years

Monthly Repayments – R 1171.58

Total Interest Payable over term of Loan R 181179.20

Total amount Paid over term of Loan R 281179.20

To Conclude

The shorter the term of the loan – the less the interest you will pay. Always take this into account when borrowing money.

Interest Rates Info

Home Loans South Africa an independent mortgage originator and work with the four major banks of South Africa. HomeLoans-SouthAfrica.co.za is not a financial services provider. All the content provided on this site is for information purposes only and in no way constitutes as legal or financial advice.