Standard Bank, First National Bank and Absa lowered their interest rates following the SA Reserve Bank's (SARB) announcement on Thursday.

Earlier, SARB Governor Tito Mboweni said the Monetary Policy Committee had decided to cut the repo rate by 100 basis points with effect from 4 May.

"Standard Bank will be decreasing its prime and home loan base lending rates from 13 percent to 12 percent, also effective Monday 4 May, 2009," the bank said.

These rate changes applied to both new and existing clients.

FNB said its rates would also be cut by one percent from 13 to 12 percent.

"The new interest rate will be applicable to all new and existing prime-linked loans, including home loans, from Monday 4 May 2009," FNB CEO Michael Jordaan said.

"We continue to urge borrowers to use declining rates as an opportunity to improve their financial position.

"Where possible, customers with mortgages should maintain their payments at pre-cut levels, as this will significantly lower the overall cost of the mortgage," he said.

Falling rates had resulted in an improvement in overall consumer indebtedness from 78 percent to 76 percent.

"We expect that this figure will fall further after today's (Thursday's) announcement," Jordaan said.

Absa said that "due to market conditions and a decrease in the repo rate from 9.5 percent to 8.5 percent," it would decrease its prime overdraft rate by one percent to 12 percent, effective from 4 May.

Absa also announced that its mortgage rates would decrease by one percent to 12 percent, also effective from 4 May.

Sapa

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