V
Loans
Variable Interest Rate
Interest that changes as the repo rate changes. Tied to prime. Your monthly payment can go up or down without warning. Not great for budgeting, but sometimes the rate drops and you're blessed.
Usage Examples
"Bongani's Absa home loan is prime minus 0.5%. When SARB cuts the repo, his monthly goes down. When they hike it, his payment jumps. Right now it's 11.5%, next month who knows."
"Nomsa locked in a fixed rate on her FNB home loan years ago, but her boyfriend got a variable rate home loan. Same property value, but his payment changes every time the repo moves. Hers stays the same."
"Andile's Nedbank car finance is variable at prime plus 1.5%. Last year when the repo dropped, his bakkie payment went from R4,800 to R4,400. This year if they hike again, it goes back up. It's stressful not knowing."