How to Prepare for the Interest Rate Decrease as a Buyer
Category RealADVICE
"The market has been anticipating a rate cut for a long time, with many buyers holding out in expectation. However, it seems the waiting is now over, as September 19th is likely the day the SARB will begin the cutting cycle," says Gerhard Kotzé, CEO of the RealNet Property Group.
"The only thing left to do now is to prepare for this inevitable change. Being ready can put you in a prime position to seize opportunities before it's too late."
Here's how to prepare as a buyer:
- Consult a Property Practitioner: The best way to prepare for the interest rate cut is by speaking with an experienced Property Practitioner. Their job is to understand the local market, so rely on them as a valuable source of information. Your chosen Property Practitioner will guide you on what you need to organize, and help you find the right property based on your needs and preferences.
- Organize your finances: Once the interest rate drops, the market will become significantly more competitive for buyers. If you're in the market for a property, it's advisable to act soon before house prices start to rise. Check if you have enough finances available to cover upfront costs such as transfer duty and bond registration fees. Securing pre-approval for a home loan will also be crucial, as it demonstrates that you're a serious buyer.
- Manage your debts: When the interest rate decreases, consider keeping your repayments the same as they were before the cut. This will help you pay off your debts faster, without feeling a bigger financial burden. If you can afford to pay off any debts before the rate decrease, it will also help you qualify for a better rate on your home loan. Prioritize paying off debts with the highest interest charges, such as car loans or personal loans.
"It's been over a year since the interest rate reached its historic high in May 2023, and for many, it felt even longer. However, it seems South Africa has a more prosperous season to look forward to."
Author: RealNet
