Repo rate | Struggling consumers urged to consider downsizing

JOHANNESBURG - The Reserve Bank's Monetary Policy Committee will announce it's interest rate decision next Thursday.

In the last meeting, the MPC decided to raise the repo rate by 50 basis point to 8.25 percent - the highest cost of borrowing since May 2009.

High interest rates are making it difficult for homeowners to keep up with their payments.

READ: Repo rate hike impacts bond repayments

Property Economist John Loos has urged consumers struggling to keep up with their home and car repayments to consider downsizing.

Loos said, "the best, and we see it a lot in our estate agent surveys, a lot of people actually prefer to sell, to downscale due to financial pressure, when you're under financial pressure that is first prize is not to let your bank have to come to you and say sorry you're in arrears now, you don't want do that, you don't want a bad credit record."

"So proactively, it's often better to downscale on your home or perhaps your vehicle because that's the way you can cut your monthly cost quite significantly in the future."

"I think you can even rent for a while. Should you however get to a stage where you're in arrears, I think the most important thing is to communicate with your bank, go to them before they go to you, banks are not really keen to repossess houses."