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Mortgage loans in December reached their highest level in 6 years, despite the rise in interest rates - Infobae
Souce:
www.infobae.com
January 08, 2025
Banks granted loans for USD 240 million during the last month of the year. What factors to consider when choosing a mortgage loan
By Jose Luis Cieri
The mortgage loan can be granted either individually or jointly, and it is not required that the spouse also be a public sector worker.
The mortgage market closed 2024 with positive signs, driven by a second half that accounted for almost all of the USD 830 million granted in UVA loans during the year.
However, eleven banks changed their rates in December, a move that introduced greater restrictions on access to loans. Still, the last month of the year stood out as the month with the highest number of mortgage loans granted, with USD 240 million , the highest figure since May 2018 .
Market growth was accompanied by changes in the conditions offered by banking institutions. Although the increase in rates and the slowdown in the pace of lending created challenges, the demand for credit responded favorably, as it showed sustained interest on the part of families and investors.
Federico González Rouco , an economist at the consulting firm Empiria and specialized in the real estate market (who provided the data on the loans awarded), explained to Infobae that this abrupt growth in applications presented challenges for the financial system, which depends on more sophisticated tools, such as securitization and the titling of portfolios, to finance in the long term.
"Today, these tools are not available in Argentina, but they could be strengthened with the lifting of the restrictions ( President Javier Milei referred to the issue ), which would open the door to foreign investors and strengthen mortgage financing," said González Rouco.
Here are some details of the most relevant changes:
This highlights the importance of considering a direct employment relationship to maximize benefits and reduce costs. For example, certain provincial banks, such as Banco del Chubut and BPN (for Neuquén residents), lead with preferential rates for their respective local residents, ranging from approximately 3.5% to 4.28%.
“And the Municipal Bank of Rosario with 4.28% is in third place, although it is aimed at the Santa Fe public. The term extends up to 20 years and between 75% and 80% of financing,” Daitch added.
In this context, institutions such as Bancor raised their rates to 6.9% for clients with salary accounts, while reducing the percentage of real estate financing from 100% to 75%; other entities, such as Banco Galicia, raised the preferential rate to 7%.
Some banks have opted to restructure other terms. El Hipotecario, for example, lowered the maximum credit term from 30 to 20 years and established a limit of $250 million. These decisions reflect an effort to adapt to a growing demand, but one that faces operational restrictions due to costs and structural financing limitations.
A couple examines options before deciding which bank they will take the risk to buy their own home (Illustrative image Infobae)
On the other hand, Banco Ciudad offers specific benefits for sectors of Buenos Aires , allowing reduced rates (3.5%) in urban areas such as the Center and Barrio Olímpico (near Villa Riachuelo).
Pablo Pirovano , a mortgage law specialist and partner at Pasbba Abogados, highlighted that these regional benefits are key tools for provincial or municipal entities to encourage the acquisition of local housing: “It is typical for provincial banks to have exclusive lines for public employees or residents.”
Comparing loans using this indicator “is one of the best ways to choose an option that fits the client’s pocket.” Daitch also suggests paying attention to the early cancellation fees offered by some banks, since they allow flexibility in case rates drop in the future.
Another essential factor is linked to avoiding mortgages in currencies other than the usual income, a common error in UVA loans , which are subject to inflation. González Rouco warned that, although they are an interesting mechanism, they also represent high risks when income does not correspond to the indexed installments.
In addition, experts recommend conducting a macroeconomic analysis to anticipate possible changes in the market and interest rates in the medium and long term.
As Pirovano noted, “ Fixed-rate credit lines may be very attractive today, but a decline in rates in the future could make them uncompetitive .”
Some strategies include:
The effective financial cost includes interest rates along with additional expenses such as insurance and commissions associated with mortgage loans, so it is advisable to carefully review the requirements and terms (Illustrative image Infobae)
National banks such as Nación and Patagonia offer terms of up to 30 years and special financing, while provincial banks limit access to local residents.
“In contrast, national entities that operate in pesos with variable rates could benefit users if rates go down, although they usually require more paperwork,” Pirovano said.
To cope with the abrupt growth in applications, the Argentine banking system will need more sophisticated tools in the long term.
González Rouco stressed the need for instruments such as “ retirement funds or pension insurance , used in more developed markets to provide stability.”
Experts agree on the importance of comparing and considering factors such as rates, terms, hidden costs and potential monetary risks before committing to a long-term mortgage loan.
www.buysellba.com
Souce:
Los créditos hipotecarios tuvieron en diciembre el mayor registro en 6 años, a pesar de la suba de las tasas
Los bancos otorgaron préstamos por USD 240 millones durante el último mes del año. Qué factores evaluar al momento de elegir un crédito hipotecario
www.infobae.com
January 08, 2025
Banks granted loans for USD 240 million during the last month of the year. What factors to consider when choosing a mortgage loan
By Jose Luis Cieri
The mortgage loan can be granted either individually or jointly, and it is not required that the spouse also be a public sector worker.
The mortgage market closed 2024 with positive signs, driven by a second half that accounted for almost all of the USD 830 million granted in UVA loans during the year.
However, eleven banks changed their rates in December, a move that introduced greater restrictions on access to loans. Still, the last month of the year stood out as the month with the highest number of mortgage loans granted, with USD 240 million , the highest figure since May 2018 .
Market growth was accompanied by changes in the conditions offered by banking institutions. Although the increase in rates and the slowdown in the pace of lending created challenges, the demand for credit responded favorably, as it showed sustained interest on the part of families and investors.
Federico González Rouco , an economist at the consulting firm Empiria and specialized in the real estate market (who provided the data on the loans awarded), explained to Infobae that this abrupt growth in applications presented challenges for the financial system, which depends on more sophisticated tools, such as securitization and the titling of portfolios, to finance in the long term.
"Today, these tools are not available in Argentina, but they could be strengthened with the lifting of the restrictions ( President Javier Milei referred to the issue ), which would open the door to foreign investors and strengthen mortgage financing," said González Rouco.
Who raised the rates
Eleven banks modified rates, financing terms and maximum amounts for mortgage loans.Here are some details of the most relevant changes:
- BBVA : Raised the rate from 5.5% to 6.5% for clients with salary accounts.
- Bancor : Increased the rate from 4.9% to 6.9% for clients with salary accounts and reduced property financing from 100% to 75%.
- Mortgage : Reduced the maximum term from 30 to 20 years, set a limit of $250 million and raised the rate to 9.5% (previously 6.9%).
- Banco Ciudad : Increased the maximum loan amount from $250 million to $350 million and adjusted the rate from 5.5% to 6.9%, maintaining the preferential rate of 3.5% for certain sectors of CABA.
- Macro : Rate increased to 6.5% for salary accounts (previously 5.5%) and to 8% without salary accounts (previously 7%)
- Galicia : Increased the rate from 5.5% to 7% for salary accounts and from 7.5% to 9% without salary accounts.
- Brubank : Raised the rate to 9% for salary accounts (previously 5.5%) and to 14% without salary accounts (previously 8%).
- ICBC : Adjusted the rate from 5% to 6.9% for salary accounts and from 7.5% to 8.9% without salary accounts, and extended the term to 20 years.
- Supervielle : Reduced the term from 30 to 15 years, adjusted the rate to 8.5% (previously 5.5%) and reduced financing from 80% to 70%.
- Patagonia : Increased the maximum amount from $250 million to $320 million, with a rate that went from 4.9% to 5.4%.
- Santander : Raised the rate from 5.5% to 7%.
What to look for
One key that specialists highlight is to carefully evaluate the offer of each bank. According to Alan Daitch , CEO of Tasa Tasa, a credit comparison platform, “banks apply significant discounts, between 1% and 2.5% , for clients who receive their salary from the same institution.”This highlights the importance of considering a direct employment relationship to maximize benefits and reduce costs. For example, certain provincial banks, such as Banco del Chubut and BPN (for Neuquén residents), lead with preferential rates for their respective local residents, ranging from approximately 3.5% to 4.28%.
“And the Municipal Bank of Rosario with 4.28% is in third place, although it is aimed at the Santa Fe public. The term extends up to 20 years and between 75% and 80% of financing,” Daitch added.
The role of banks and patterns detected
The general rise in interest rates is due to two main factors. Regarding this, González Rouco explained: “ Funding mortgage loans is expensive for banks, since they are loans with very high tickets .”In this context, institutions such as Bancor raised their rates to 6.9% for clients with salary accounts, while reducing the percentage of real estate financing from 100% to 75%; other entities, such as Banco Galicia, raised the preferential rate to 7%.
Some banks have opted to restructure other terms. El Hipotecario, for example, lowered the maximum credit term from 30 to 20 years and established a limit of $250 million. These decisions reflect an effort to adapt to a growing demand, but one that faces operational restrictions due to costs and structural financing limitations.
A couple examines options before deciding which bank they will take the risk to buy their own home (Illustrative image Infobae)
On the other hand, Banco Ciudad offers specific benefits for sectors of Buenos Aires , allowing reduced rates (3.5%) in urban areas such as the Center and Barrio Olímpico (near Villa Riachuelo).
Pablo Pirovano , a mortgage law specialist and partner at Pasbba Abogados, highlighted that these regional benefits are key tools for provincial or municipal entities to encourage the acquisition of local housing: “It is typical for provincial banks to have exclusive lines for public employees or residents.”
Practical recommendations
There are several key tips when evaluating financing options. One of the pillars is the analysis of the Effective Financial Cost (CFE) , a metric that includes interest rates, insurance and other associated expenses.Comparing loans using this indicator “is one of the best ways to choose an option that fits the client’s pocket.” Daitch also suggests paying attention to the early cancellation fees offered by some banks, since they allow flexibility in case rates drop in the future.
Another essential factor is linked to avoiding mortgages in currencies other than the usual income, a common error in UVA loans , which are subject to inflation. González Rouco warned that, although they are an interesting mechanism, they also represent high risks when income does not correspond to the indexed installments.
In addition, experts recommend conducting a macroeconomic analysis to anticipate possible changes in the market and interest rates in the medium and long term.
As Pirovano noted, “ Fixed-rate credit lines may be very attractive today, but a decline in rates in the future could make them uncompetitive .”
Some strategies include:
- Choosing entities with free loan cancellation: allows you to change entities in the event of a decrease in rates.
- Compare entities based on customer profile: For example, Banco Macro offers special financing for people under 30 years of age with up to 90% of the value of the property (with parental guarantee); Banco Ciudad launched the first mortgage loan for the purchase of apartments in a condominium ; Banco Nación offers additional benefits for those who have committed money laundering.
Differences and challenges
The banking market presents clear differences in accessibility and financial conditions depending on the institution.
The effective financial cost includes interest rates along with additional expenses such as insurance and commissions associated with mortgage loans, so it is advisable to carefully review the requirements and terms (Illustrative image Infobae)
National banks such as Nación and Patagonia offer terms of up to 30 years and special financing, while provincial banks limit access to local residents.
“In contrast, national entities that operate in pesos with variable rates could benefit users if rates go down, although they usually require more paperwork,” Pirovano said.
To cope with the abrupt growth in applications, the Argentine banking system will need more sophisticated tools in the long term.
González Rouco stressed the need for instruments such as “ retirement funds or pension insurance , used in more developed markets to provide stability.”
Experts agree on the importance of comparing and considering factors such as rates, terms, hidden costs and potential monetary risks before committing to a long-term mortgage loan.
www.buysellba.com
