Fixed rate mortgage shares by country

While fixed rate mortgages are quite common in many countries, South Africa stands out for having a very low proportion of fixed rate mortgages. The IMF argues that this strengthens monetary policy transmission in South Africa. However, the IMF analysis does not consider that South Africa also stands out for having deposit rates that are quite ‘sticky’ and have tended not to fully reflect monetary policy tightening. As we argued here, slow, and incomplete pass-through of policy changes to deposit rates means that financial conditions have not tightened as much as the policy rate suggests. This is also likely to have distributional consequences, as poorer individuals may hold proportionately larger balances in cheque accounts than wealthier individuals.