The 25-basis point interest rate cut by the South African Reserve Bank (SARB) was largely expected, given the prevailing low inflation and muted economic growth in the first quarter of 2025. South Africa’s GDP grew by only 0.1% in the first quarter, while inflation remained at the lower end of the SARB’s target range, at 3% in June.

Standard Bank believed the odds were tilted in favour of another rate cut. However, the SARB is now targeting a 3% inflation rate, lower than the previous midpoint of 4.5%. This move that could reshape the outlook for future interest rate decisions and some homeowners may now be asking: Should I fix my bond rate now?

Toni Anderson, Head of Home Services at Standard Bank, says the answer depends on your financial outlook. “If you fix your rate now and the SARB starts hiking again, you’ve shielded yourself from future increases, which can bring much-needed predictability to your monthly expenses,” she explains. “This could be a smart move if inflation remains sticky or if the target range is lowered as such developments could affect future interest rates decisions.”

However, there’s also a downside. “If rates continue to fall or stay low for longer, fixing your rate could mean you end up paying more than you would on a variable rate,” Anderson adds. “That’s why we encourage customers to consider their financial goals, risk tolerance, and how long they plan to stay in their home.”

As the economic outlook remains uncertain, the decision to fix or float should be based on personal risk tolerance and how long you plan to stay in your home.