The Monetary Policy Committee (MPC) of the Bank of Namibia has decided to increase the Repo rate once again by a whopping 75 basis points to 5.50% from 4.75% in the meeting held on 17 August 2022.
Analysts have also predicted that the Bank of Namibia is expected to increase rates by another 100 basis points before the end of the year as domestic and global inflation heats up while economic growth is cooling down.
Rising repo rates affect affordability. So, homeowners, plan and make room in your budgets to afford slightly higher monthly bond installments. Make sure you have enough disposable income left after your bond repayment – factoring in the rising costs of living such as fuel and food prices.
Existing homeowners can use the Bank Windhoek bond calculator ( https://www.bankwindhoek.com.na/Pages/Calchome.aspx ) to calculate their new installment. For example, an instalment for a N$ 2,000,000.00 bond at the old home loan rate of 9.50 has an instalment of about N$ 18,642.62 with the new rate of 10.25% the monthly instalment is about N$ 19 632.87. That is an additional N$ 990,25 you have to pay.
The increase in repo rate also increases the repayments on other debts like vehicle finance and credit cards. In addition, interest rates are expected to rise even further by the end of the year, so now is the time for consumers to put their household budgets under the magnifying glass.
For people who are looking to sell, affordability is going to decline across the board. This means buyers will focus on value for money, which will pressure price growth. I advise serious sellers to anticipate this and start setting their selling prices accordingly.
It will become even more important to pick agents with excellent negotiating skills that work for reputable agencies with access to the resources that will ensure your home gets maximum exposure to potential buyers and sustain the transaction through registration.
For enquiries Text, Call or email #yourhomegirl Justina Hamupembe
Cell: +264812726001
Email: Justina@chili.com.na
