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Cape Town - First National Bank (FNB) was the first of the big four banks to announce that it is increasing its prime lending rate by 0.5% to 9.0%.
The move comes after the announcement on Wednesday by Reserve Bank governor Gill Marcus that the central bank's Monetary Policy Committee has decided to hike the repo rate by 50 basis points to 5.5%.
Calculate how much more you'll have to pay on your home loan.
FNB said it will increase its prime-linked rates on January 30 2014.
The bank said consumers should exercise greater caution now that interest rates had been raised for the first time in just under six years.
“The last rate hike was in June 2008 when rates reached 15.5%. Since then, we have had five years of falling and stable rates,” said FNB CEO Jacques Celliers.
He said many of South Africa's peer countries have already hiked rates in expectation of further reductions in the US Federal Reserve's quantitative easing programme.
"They have done so to ensure domestic economic and currency stability."
FNB encouraged consumers to set aside additional amounts in their budgets before mortgage and other payments fall due at the end of the month.
Although home owners and consumers with interest-bearing loans will feel the brunt, Celliers welcomed the rate hike as positive for investors dependent on interest income.
"They have struggled under declining and stable rates in recent years.”
The move comes after the announcement on Wednesday by Reserve Bank governor Gill Marcus that the central bank's Monetary Policy Committee has decided to hike the repo rate by 50 basis points to 5.5%.
Calculate how much more you'll have to pay on your home loan.
FNB said it will increase its prime-linked rates on January 30 2014.
The bank said consumers should exercise greater caution now that interest rates had been raised for the first time in just under six years.
“The last rate hike was in June 2008 when rates reached 15.5%. Since then, we have had five years of falling and stable rates,” said FNB CEO Jacques Celliers.
He said many of South Africa's peer countries have already hiked rates in expectation of further reductions in the US Federal Reserve's quantitative easing programme.
"They have done so to ensure domestic economic and currency stability."
FNB encouraged consumers to set aside additional amounts in their budgets before mortgage and other payments fall due at the end of the month.
Although home owners and consumers with interest-bearing loans will feel the brunt, Celliers welcomed the rate hike as positive for investors dependent on interest income.
"They have struggled under declining and stable rates in recent years.”
