Authored by Patrick Bracher and Michael McCarthy.
The prescribed rate of interest is 10.50 per annum with effect from 1 July 2026. The previous rate was 10.25% per annum.
According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all debts unless a different rate is set by law, by trade custom, or by agreement between the parties. The parties can therefore avoid the application of the prescribed rate by agreeing to a different interest rate, subject to other applicable laws such as the National Credit Act which may limit the amount of interest that can be charged. A judgment debt bears interest automatically from the day on which the judgment debt is payable even if the judgment does not expressly say so, unless the court order provides otherwise.
When the Reserve Bank changes the repo rate a new prescribed rate of interest becomes effective from the first day of the second month following the month in which the new repo rate is determined by the Reserve Bank. The applicable rate of interest for a debt is the rate that is in effect at the time when the interest begins to run. That rate will continue to apply even if the prescribed rate of interest changes at a later date.
Do not look for a Government Gazette notice of the new rate. Gazetting is not a requirement for the change, and such notices are not always published on time, or at all, by the Minister.
Here is a table of the changes in the prescribed rate since 1993 (note: there was no change in 2021):
