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Every time the Repo Rate change to a down I must first phone SA Home Loans before they change my monthly installment and everytime they do have this mega excuse. How many Home Owners do they cheat. If they stay on the same monthly installment for a month I am sure they make a few bucks illegaly. The repo rate came down in the middle of September 2010 but still for the end of September and October my monthly instalment is the same.
There’s a simple (albeit long) explanation for Thelma’s question. SA Home Loans uses JIBAR (Johannesburg Interbank Agreed Rate) as its base rate, while the banks use Prime as their base rate. This is because of SA Home Loans funding model, which is based on raising capital though securitization and can be described as a “wholesale” market versus the retail market of the banks. JIBAR is an independently determined 3-month rate quoted on the SA Future Exchange, calculated by obtaining rate quotes from ten banks every day. The average of the rates, published at 11am every day, is the quoted JIBAR rate. JIBAR is approximately 3.5% lower than prime (approximating Repo), and SA Home Loans adds on a “link rate” (of between 2.6% and 3.7% depending on a client’s risk profile) to get to the final interest rate given to their clients.
Prime is based on the REPO rate which is decided at Monetary Policy Committee Meetings every 6-8 weeks. JIBAR is quoted daily. JIBAR and Prime are strongly correlated – but because JIBAR is set daily, it tends to anticipate what is going to happen to Prime – the interbank lending rate will account for any anticipated movements in the REPO rate. Thus JIBAR and Prime have different movement timings, but generally move in the same direction.
Obviously SA Home Loans cannot change their lending rate daily with JIBAR movements, so their lending rates are reset on a quarterly basis on predetermined dates. JIBAR is reviewed on these dates, and the latest market quoted JIBAR rate is used to determine the interest rate for existing clients. Depending on the rate quoted, it is possible for rates to remain the same, increase or decrease. The client’s link rate does not change for the duration of their home loan term, but their lending rate may change when JIBAR is reviewed every quarter.
The effect on SA Home Loans clients is that their interest rate will not move at the same time as Prime, but only on predetermined quarterly reset dates.
In this particular case, prime moved down prior to the next SAHL quarterly reset date, meaning that the customer had to wait a little longer for their rate to reset downwards. Of course if (and when) Prime moved up, the same would apply, i.e. our customers would continue to enjoy their lower rate for a little longer until the next SAHL quarterly reset date.
Evaluating the house after I've payment of lawyers or during lodging process.
Revert back to me for more information
Please contact me I know of person that claimed for damages and never used money to fix My e mail is gmulder 21@gmail.com
I put a claim in at SA homeloans two weeks ago and until now the problem has not been fixed.