It is clear that the general economy and the economy of the property industry affect me and you. Currently (as predicted by many in-the-know) our economy is heading into a rate hike phase; we’ve seen the beginning of it recently with the rate hike in July this year.
The Repo (Repurchase) rate is the interest rate at which the private sector (banks) borrows Rands from the Reserve Bank. And, as in any household, when interest rates rise, you cut back a little. With interest rate hikes, banks are expected to start cutting back on lending. You might wonder what that has got to do with you…
How does the Repo Rate affect you?
When the repo rate increases it affects the general lending rate that the banks charge the public. If you have a bond with a bank and the repo rate is increased, the interest rate your bank charges you on your loan is also increased. This tends to affect property sales, particularly in the residential segment. Not to mention the different knock-on effects on other credit commitments and day-to-day living costs (suddenly that sirloin doesn’t look too bad).
On a serious note though, this may also mean that the required deposit for properties purchases increase. So what do you do now? You’ve diligently saved for your deposit and the goal posts have now moved. You have some additional funds from the sale of your home but if you wait the 3 months for transfer, you’ll lose your dream home!
This is where we come in…
You’ve sold your house and already have your eye on that dream home. But there’s a catch…with the repo increase, the bank now requires a 20% deposit and you have only saved 10% deposit. You cannot stand to see another person taking your dream home; you need to come up with a plan, fast!
With Rodel you can get up to 80% of the profit you may have made, from the sale of your home! We also provide existing property owners, who have applied for and been granted a new, further or switch bond with up to 80% of the proceeds from the new, further or switch bond; helping you dodge the repo rate bullet and still buy that dream home.
You don’t have to worry about unstable and unexpected fees on your bridging finance as our discounting fee is not increased to accommodate the increases in repo– we absorb the cost!
Go on, contact us today and let’s Rodel it!