Rate cut won’t help economic activity much – Sacci
South African Chamber of Commerce and Industry (Sacci) CEO Neren Rau says while business and consumers would welcome an interest rate cut‚ it was unlikely to make a substantial difference to the economy at this stage.
Today the biggest problem when obtaining a home loan is an applicant’s credit history and payment profile. Sure, a 0,5% decrease in interest rate will have an effect on existing home owners with outstanding mortgages, but I also don’t see a lower interest rate resulting in more approved home loan applications.
For those who don’t know, the lower your interest rate, the higher the possible amount that you will qualify for. It is however also dangerous to count on the current low interest rate to purchase to your maximum affordability, because once the interest rates rise again you will still have to be able to repay your loan.