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Mortgage loans: How much could payments increase in 2025? - La Nacion Propiedades
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Créditos hipotecarios: ¿cuánto podrían aumentar las cuotas en 2025?
Un informe reveló cuál es la proyección de la inflación en 2025; ¿cómo impactaría esa suba en las cuotas de los créditos hipotecarios?
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April 08, 2025
A report revealed the inflation projection for 2025; how would this increase impact mortgage payments?
By Candela Contreras
Despite the drop in inflation, mortgage loans remain unaffordable for many. What would it take for credit to recover? Shutterstock
The reappearance of UVA (Purchasing Value Unit) mortgage loans , starting in the second half of 2024, marked a turning point in the Argentine real estate market , after years of stagnation and falling prices.
The change in the market with the return of loans is already reflected in the numbers: in the first two months of 2025 , around 5,000 mortgage loans were granted nationwide . Although January and February tend to be months with a drop in transactions—and this was reflected in the total number of transactions—this was not the case in the case of mortgage purchases. "The data show the positive evolution of this type of loan and the strong demand for them," highlighted Fernando Álvarez de Celis, executive director of the Tejido Urbano Foundation.
In terms of financing volume - nationwide - in January, mortgage loans to individuals totaled US$186 million , in February the figure rose to US$204 million nationwide , while in March it reached US$214 million , according to data provided by the consulting firm Empiria based on the BCRA. This sustained growth reflects market confidence and the need for financing for home purchases. This comes after US$184 and US$187 million were granted in November and December, respectively .
“There are more inquiries and credit transactions. It's not yet at the levels it was in 2017—during the Macri administration—but there is starting to be more activity . Still, the inquiries we receive are around 10% of the total, not much more,” says Lorenzo Raggio, general manager of Interwin.
One factor behind this data is that since November, 12 of the 24 banks that offer loans have decided to raise mortgage interest rates , further increasing the cost of housing. Market analysts point out that this trend is a response to financial institutions' need to somehow curb demand given their limited lending capacity. "With a lower rate, more people qualify, but banks don't have the necessary funding for this to happen, which is why rates are rising," explains José Rozados, founder of Reporte Inmobiliario.
It's important to clarify that loans in Argentina depend largely on inflation , as the UVA (UVA) is adjusted daily according to the Consumer Price Index (CPI), which initially allows for a low balance to be paid. However, in an economy with a history of doom, the risk of increases over time is high. In the last six months, monthly payments on these loans increased by 15.9% . Therefore, rising prices and economic volatility can be variables that complicate access to financing.
In this sense, 2024 closed with inflation at 117.8% , but what is expected for 2025? If inflation slows as projected, rates may also stabilize, allowing greater predictability for borrowers.
Inflation directly impacts mortgage loan paymentsSuperOhMo - Shutterstock
Projections for 2025
According to projections from the latest LatinFocus report, which compiles estimates from more than 50 banks and consulting firms, inflation is expected to reach 26.6% by the end of the year , which could generate some relief in interest rates. However, experts warn that other factors could work against it. Is a more favorable year on the horizon for those looking to buy a home ?Fabián Achával, from the real estate company of the same name, emphasized that beyond inflation, the key to the consolidation of the mortgage market is the recovery of purchasing power, as "the demand for loans depends on disposable income. For the mortgage market to grow, it is essential that wages recover and interest rates fall."
Federico González Rouco, an economist specializing in housing, also emphasizes this point: " The main factor driving credit growth is salary . Without an increase in income, access to credit remains limited for many families."
Achával adds that "although projected inflation for 2025 is lower than last year's, the problem remains the relationship between payments and salaries . As long as incomes don't keep up, many people will continue to postpone the decision to go into debt."
“ Low inflation is a sign of stability , and that creates peace of mind when considering a loan. But the important thing is knowing if you'll be able to afford the installment on your salary ,” says González Rouco. He explains that in 2018, loans slowed down due to devaluation, not inflation. “Of course, for someone thinking about making such a decision, low inflation is reassuring, but it's not the most important factor .”
Rozados adds that, “regardless of the inflation rate, anyone taking out a loan must be aware that their payment and principal will be adjusted in UVA (UVAs) . Therefore, the initial decision must be made responsibly, knowing this and anticipating that they will be able to afford a future increase, taking into account their employment situation and income.”
It's important to emphasize that the UVA unit of account exists and makes sense because there's inflation . On the other hand, if there were no instability, "lending would be done directly in pesos, and no index would be necessary. The unit of account is necessary because there are high inflation rates ," adds the founder of Reporte Inmobiliario.
Real estate market analysts agree that the important thing is the rise in wages.Uladzimir Zuyeu - Shutterstock
What would have to happen for there to be a credit readjustment?
To make mortgage loans more accessible , several factors are needed to generate greater stability in the financial and banking system.Rozados explains that, from a macroeconomic perspective, “ it makes sense to think that as inflation falls, so should interest rates . ”
The specialist also points out that the structural solution for a sustainable mortgage credit system is for banks to be able to securitize loans , as is the case in other countries: "Today, we rely on the availability of money in various accounts. The logic is that, as inflation continues to fall and the macroeconomy strengthens, we will move toward a system with greater access to mortgage credit ."
Achaval agrees that the key is a combination of wage recovery and lower rates : “For credit to recover, two things must happen: wages must recover and rates must fall . All the loans granted now are at rates prior to the last increase. But banks currently have little liquidity , and as long as the Central Bank continues its policy of monetary restriction to curb inflation, there will be no more pesos available to lend. If inflation begins to fall, the monetary authority will be able to be more lax, and that will allow rates to fall.”
Another key factor is the exchange rate restriction , which generates uncertainty in the market. "There's no forecast for when it could be lifted, and if it is, there's fear of a currency spike. To avoid this, we need dollars," Achaval added.
For his part, Raggio emphasizes that the lack of competition among banks is also an obstacle : "Today, loans are still expensive, not only because of inflation, but also because of bank rates. Nor are banks eager to invest more in mortgage loans because they are unprofitable. They are not yet competing to see who can win more customers."
The real estate developer points out that this could change with new macroeconomic conditions : “ Rates are expensive , but we believe that as inflation continues to fall, banks will begin to compete more, and that will increase demand for loans . Ideally, the bank rate would settle around 6%, but banks today are looking for faster deals and don't have many funds to lend .”
He also suggests that the agreement with the International Monetary Fund could improve the situation : "It may be that now, with the agreement with the IMF, banks can get fresher funds for mortgage loans, and that would allow them to compete a little more."
If inflation falls as LatinFocus projects , mortgage loans could become more affordable in 2025. However, everything will depend on the BCRA's policy and exchange rate stability . In a market with such volatility, the coming months will be key to determining whether more Argentines will be able to afford their own homes.
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