Local banks hope repo rate cut will slightly cushion loan holders
Some local banks decreased their prime lending rate, following the decision by the central bank to cut the repo rate by 25 basis points to 6.25%.
Standard Bank Namibia last week announced that its prime lending rate decreased from 10.25 to 10 % on home loans, vehicle, asset finance and personal loans as of 20 February.
Standard Bank’s head of products, Peter Hiwilepo, expressed hope that the reduction in prime lending rate will give some marginal relief to customers because of the expected reduction in their repayment installments on home bonds, vehicles, and other loans.
“Consumers are, however, urged not to borrow more than they can afford to repay and also not to reduce the installments on their loan repayments due to the rate cuts,” he advised.
Bank Windhoek also confirmed the reduction of its prime lending rate to 10%, while the mortgage lending rate will decrease from 11.25 to 11% as of 4 March.
According to Bank Windhoek head of funding and liquidity management, Diederik Kruger, the reduction in interest rates was aimed at resuscitating the economy and to give much-needed relief to consumers.
“Hopefully the decrease in interest rates and lower house prices will help new or first-time buyers to own a house of their own. We recommend that clients make use of this opportunity to pay off their debt quicker or start saving to give them a buffer against unforeseen expenses,” Kruger concluded.