The trend of people moving out of bustling cities to quieter country towns in pu For homeowners, the rapid rise in interest rates materially increased monthly bond repayments, particularly for customers on variable-rate home loans.
For most households the monthly home loan instalment represents the biggest monthly expense.
The generally higher inflation that leads to higher interest rates places strain on these customer’s affordability and their ability to maintain regular and timeous payments on their home loans, says Nondumiso Ncapai, the Managing Executive for Home Loans Personal & Private Banking at Absa.
She says this was particularly evident during the latter part of 2022 and 2023 when South Africa experienced an environment of increased interest rates, where more customers were defaulting on their instalments.
“The macro-economic climate has changed significantly over the last decade, shaped by varying cycles of inflation and corresponding movements in interest rates."
