Johannesburg - SA's retail banks will cut lending rates following the SA Reserve Bank monetary policy committee's decision to cut the repo rate by 50 basis points to 5.5%.
First National Bank said on Thursday afternoon that it would cut its prime lending rate by 0.5% from 9.5% to 9%.
“The new interest rate will be applicable to all new and existing prime linked loans, including home loans, from Friday November 19, 2010.”
CEO of FNB Michael Jordaan said: “The monetary authorities are responding to unusual conditions in international financial markets. I believe that the cut is responsible and will modestly stimulate our economy.”
Standard Bank Group [JSE:SBK] said that following the reserve bank's announcement it would be decreasing its prime and home loan base lending rates from 9.5% to 9%, effective Friday November 19, 2010.
“These rate changes apply to new and existing clients.”
Nedbank Group [NED] also announced a 50 basis point decrease in its prime overdraft rate, the vehicle and asset finance rate and the mortgage rate applicable to home loans - from 9.5% percent to 9.00%.
“The interest rate for both new and existing vehicle and asset finance loans as well as new and existing home loans will decrease with effect, 19 November 2010.”
Absa Group [JSE:ASA] said that due to the decrease in the repo rate it would cut its prime overdraft rate by 0.5% to 9.% effective from November 19, 2010.
“Mortgage rates will be decreased by 0.5% to 9% effective from 19 November 2010.”
“The latest cut brings the mortgage rate to its lowest level since mid-1974,” Luthando Vutula, Managing Executive of Absa Home Loans said.
He added that mortgage repayments will now be approximately 33.5% lower than in late 2008 when the mortgage rate stood at 15.5%.