Save like a squirrel

SA Reserve Bank Governor Tito Mboweni has been cutting the interest rate at an astonishing rate since December. Yet there are complaints from some quarters that the amount he's been lopping off at every Monetary Policy Committee meeting is not enough to get the economy, and in particular the property market, humming again.

The repo rate, and along with it the prime commercial rate offered to home loan customers by banks, has dropped by 3,5% since just before Christmas.

At 8,5% - and the prime rate at 12% to bank customers - from Monday, it is now not far off where it was when interest rates were at a low in June 2006.

You'll remember 2006 as a year when we were all still happily spending on our credit cards and property purchases, both of existing homes and off-plan, were as easy as signing to say your offer was subject to a 100% bond.

You didn't need a hefty deposit, your spending details weren't excessively scrutinised and your bank manager didn't care particularly what sector you worked in or how long you'd been working in the same job.

That's a far cry from the picture now if you are applying for a mortgage. Bank managers are very nervous about giving home loans to people in certain industries, like mining
.

The self-employed, including professionals like doctors and lawyers who have been loyal bank customers for many years as they have paid off study and other loans, are among those who are finding it most difficult to strike home loans these days.