South Africa’s prime interest rate is 10.75% a year. It has been at this level since 25 September 2026, when the South African Reserve Bank (SARB) raised the repo rate to 7.25%. Prime is always 3.5 percentage points above the repo rate, so it moves whenever the repo rate does. The next rate announcement is on 19 November 2026.
What is the prime interest rate?
The prime interest rate, also called the prime lending rate, is the benchmark banks use to price many loans in South Africa. Home loans, vehicle finance, overdrafts and some personal loans are quoted as “prime plus” or “prime minus” a margin. Since 2001, prime has been set at a fixed 3.5 percentage points (350 basis points) above the SARB’s policy rate, the repo rate (SARB).
How does the prime rate follow the repo rate?
Prime changes by exactly the same amount as the repo rate. The repo rate is the rate at which the SARB lends money to banks. Its Monetary Policy Committee (MPC) sets it to keep inflation close to the 3% target (SAnews). When the MPC moves the repo rate, banks move prime by the same amount.
Prime rate = repo rate + 3.5 percentage points
| Change took effect | Repo rate | Prime rate | Change |
|---|---|---|---|
| 25 September 2026 | 7.25% | 10.75% | +0.25 points |
| May 2026 | 7.00% | 10.50% | +0.25 points |
| Before May 2026 | 6.75% | 10.25% | ā |
What does the prime rate mean for your loan?
Prime only changes your instalment if your loan has a variable rate linked to it. The rate you pay is set by your lender, based on the loan type and your own risk profile.
- Variable-rate loans: if your credit agreement links the rate to prime (or to the repo rate), your rate and instalment change when prime changes. Home loans and vehicle finance are often variable.
- Fixed-rate loans: the rate agreed at the start stays the same for the whole term, even if prime moves. Many personal loans have a fixed rate. Your credit agreement tells you which one you have.
- Your margin: lenders look at your credit record, income and affordability. That is why two people can be offered different rates for the same loan amount.
- The legal maximum: the National Credit Act caps interest per type of credit, and the caps follow the repo rate, not prime. For unsecured credit, such as most personal loans, the maximum is the repo rate plus 21% a year (Government Gazette 39379). At today’s repo rate of 7.25%, that is 28.25% a year.
Read more about fixed and variable interest rates, or estimate repayments with our personal loan calculator.
Is the prime rate being scrapped?
Possibly, but not yet, and the proposal would not change what you pay. In 2026 the SARB published a consultation paper proposing that banks stop using prime as a reference rate. Loans would instead be quoted as a margin above the SARB policy rate (the repo rate).
- What would change: only how the rate is described. A loan at prime + 1% would be quoted as repo + 4.5%.
- What would stay the same: the SARB says actual loan pricing would remain unchanged.
- When: no date has been set. The SARB expects the switch to start only after Jibar, another reference rate, has been retired.
What can you do when interest rates rise?
Start by checking which of your loans have a variable rate, because those are the ones that cost more after a hike.
- Check your agreements: find out which loans are fixed and which follow prime.
- Update your budget: work out what a higher instalment means for your month before it arrives.
- Combine expensive debt: if you have several loans, a consolidation loan may make repayments easier to manage.
- Compare before you borrow: with Arcadia Finance you can compare personal loan offers from several lenders with one application.
- Get help early: if you are already behind, read what happens if you can’t pay your debt.
Frequently Asked Questions
What is the prime interest rate in South Africa today?
10.75% a year, since 25 September 2026. It is the repo rate of 7.25% plus 3.5 percentage points.
What is the difference between the repo rate and the prime rate?
The repo rate is the rate at which the SARB lends to banks. Prime is the benchmark banks use for their customers’ loans, and it is always 3.5 percentage points above the repo rate.
When will the prime rate change next?
Prime only changes after a decision by the SARB’s Monetary Policy Committee. The next announcement is on 19 November 2026.
Does the prime rate affect my personal loan?
Only if your loan has a variable rate linked to prime or the repo rate. A fixed rate stays the same for the whole term. Your credit agreement shows which one you have.
Will the repo rate replace the prime rate?
The SARB has proposed it, but no date has been set. If it happens, loans would be quoted as a margin above the repo rate, and the SARB says actual loan pricing would remain unchanged.
Does Arcadia Finance give financial advice?
No. This article is general information. Arcadia Finance is a loan comparison service, not a credit provider or financial adviser.
Sources
- SARB: Consultation paper: cessation of the prime lending rate (2026)
- SARB: Media release on the consultation paper on the cessation of the prime lending rate (2026)
- SARB: Monetary Policy Committee (upcoming announcement dates)
- SAnews: MPC raises repo rate to 7.25% (23 September 2026)
- Acts Online: SARB increases repo rate to 7% effective May 2026 (28 May 2026)
- Daily Maverick: Sarb proposes major reform ā ditching prime lending rate for repo rate (16 February 2026)
- Department of Trade and Industry: Review of Limitations on Fees and Interest Rates Regulations, Government Gazette 39379 (6 November 2015)
- National Credit Regulator: register of credit providers
This article is general information and not financial advice.
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