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UVA mortgage loan payments rose 15.9% in six months: what's expected for the rest of the year? - Infobae
Source:
www.infobae.com
March 22, 2025
The inflation adjustment is already impacting recent borrowers, while moderate increases are projected in the coming months. Keys to deciding wisely before signing a loan
By Jose Luis Cieri
The inflation adjustment is already reflected in mortgage loan payments: accurate calculations are key before making a commitment.
Since mid-2024, the reappearance of UVA mortgage loans has reshaped access to housing. With a scheme that adjusts payments for inflation, those who accessed these loans, granted by 25 banks, are already facing monthly payment increases.
Although these increases are expected, given that the payments are adjusted based on the price index (inflation has fallen sharply in the last six months, see chart below), in practice they represent a growing burden on the family budget. It is advisable for policyholders to carefully review not only the current value of the payment, but also its expected evolution in the coming months.
Cumulative inflation in Argentina during the six-month period between September 2024 and February 2025 was 15.9%. The monthly variations in the Consumer Price Index (CPI) during that period are detailed below:
The change is already reflected in the numbers: 5,500 mortgage loans were granted in January and February 2025 , half of all those granted in the second half of last year, since banks began reintroducing this line of financing.
Source: National Institute of Statistics and Census of the Argentine Republic (INDEC)
Federico González Rouco , an economist at Empiria specializing in the real estate market, explained that "the inflation adjustment is automatically transferred to the monthly payment, so the recent monthly increase is between 2% and 2.5%."
He emphasized that projections for the coming months point to a lower inflation path, provided key variables such as the exchange rate remain unchanged (in recent days, the blue dollar and MEP exchange rates have risen after several weeks of stability ). "If there is no exchange rate jump, monthly inflation should remain below 2%," González Rouco said.
In the last six months, mortgage payments have seen a cumulative increase of 15.9%. A loan with an initial payment of $600,000 in September now stands at approximately $695,000, similar to the rent for an apartment or a three-bedroom house in the Greater Buenos Aires Metropolitan Area (AMBA). According to González Rouco, "payments will always rise in pesos as long as inflation remains positive."
Projections show a slight deviation from the downward price path: February inflation was 2.4%, and a similar level is expected for March . Consulting firms estimate a more pronounced slowdown in April or May. The Central Bank projects an annual rate of 23.3%, BBVA Research estimates 30%, and the OECD estimates 28.4%. The big question is whether wages will be able to keep up with the pace of price increases, especially in a context of exchange rate pressure and volatile expectations.
In this scenario, some analysts believe that the evolution of mortgage loan payments also depends on external factors. A firm agreement with the IMF could help stabilize expectations and slow the rate of increases. Otherwise, the devaluation could reinforce the negative impact on household purchasing power.
At the same time, those who already have a loan could opt to refinance if the banks allow early cancellation without penalty.
Alan Daitch , CEO of Tasa Tasa, explained that "the analysis shouldn't be limited to the amount of the first installment." It's key to evaluate how that installment will change based on inflation and consider all additional costs: insurance, bank fees, and deed fees. "Our goal is to help each person compare real-world conditions between banks and decide based on their profile," he stated.
Through the platform, which allows for installment simulations and prequalification with various banks, they have observed a sustained increase in user inquiries over the past few months. In addition to the first-time homeowner segment, they have also seen the addition of families planning local moves and small investors looking for areas experiencing appreciation.
Daitch emphasized that digitalization helps reduce barriers to accessing financing, but warned that trust in the UVA system needs to be strengthened.
For those considering taking out a loan today, those in the segment agree that it's a structural decision. Payments could extend for 20 or 30 years, so it's best to ensure they represent no more than 25 or 30% of family income.
It's also suggested considering different inflation scenarios, analyzing job stability, and checking whether the bank you choose allows early repayments.
The improved conditions of 2025 could last, but they could also be modified if the macroeconomic environment changes. Home sales prices are expected to continue to rise, albeit gradually (Illustrative Image: Infobae)
"In this context, choosing well is more important than choosing quickly," Daitch summarized. While projections show a favorable trend, Argentina's experience requires a cautious approach.
Areas with lagging market values or properties with negotiable margins may offer additional advantages to those who access them with credit.
In this context, banks offer simulators and conditions that vary by institution. Comparing rates, terms, associated costs, and flexibility for early repayments is key to making more informed decisions. As mortgage lending recovers, the behavior of inflation and the exchange rate will determine the pace of installments and the true scope of financing.
"For the time being, the only way to prevent the payment increase for those who have already accessed a loan and become homeowners is for inflation to remain at zero. According to bank reports, delinquency rates in recent months have been practically zero," concluded González Rouco.
www.buysellba.com
Source:
Las cuotas de los créditos hipotecarios UVA subieron 15,9% en seis meses: qué se espera para lo que resta del año
El ajuste por inflación ya impacta en los tomadores recientes, mientras se proyectan aumentos moderados en los próximos meses. Claves para decidir con prudencia antes de firmar un préstamo
www.infobae.com
March 22, 2025
The inflation adjustment is already impacting recent borrowers, while moderate increases are projected in the coming months. Keys to deciding wisely before signing a loan
By Jose Luis Cieri
The inflation adjustment is already reflected in mortgage loan payments: accurate calculations are key before making a commitment.
Since mid-2024, the reappearance of UVA mortgage loans has reshaped access to housing. With a scheme that adjusts payments for inflation, those who accessed these loans, granted by 25 banks, are already facing monthly payment increases.
Although these increases are expected, given that the payments are adjusted based on the price index (inflation has fallen sharply in the last six months, see chart below), in practice they represent a growing burden on the family budget. It is advisable for policyholders to carefully review not only the current value of the payment, but also its expected evolution in the coming months.
Cumulative inflation in Argentina during the six-month period between September 2024 and February 2025 was 15.9%. The monthly variations in the Consumer Price Index (CPI) during that period are detailed below:
- September 2024 : 3.5%.
- October 2024 : 2.7%.
- November 2024 : 2.4%.
- December 2024 : 2.7%.
- January 2025 : 2.2%.
- February 2025 : 2.4%.
The change is already reflected in the numbers: 5,500 mortgage loans were granted in January and February 2025 , half of all those granted in the second half of last year, since banks began reintroducing this line of financing.
Source: National Institute of Statistics and Census of the Argentine Republic (INDEC)
Federico González Rouco , an economist at Empiria specializing in the real estate market, explained that "the inflation adjustment is automatically transferred to the monthly payment, so the recent monthly increase is between 2% and 2.5%."
He emphasized that projections for the coming months point to a lower inflation path, provided key variables such as the exchange rate remain unchanged (in recent days, the blue dollar and MEP exchange rates have risen after several weeks of stability ). "If there is no exchange rate jump, monthly inflation should remain below 2%," González Rouco said.
In the last six months, mortgage payments have seen a cumulative increase of 15.9%. A loan with an initial payment of $600,000 in September now stands at approximately $695,000, similar to the rent for an apartment or a three-bedroom house in the Greater Buenos Aires Metropolitan Area (AMBA). According to González Rouco, "payments will always rise in pesos as long as inflation remains positive."
Projections show a slight deviation from the downward price path: February inflation was 2.4%, and a similar level is expected for March . Consulting firms estimate a more pronounced slowdown in April or May. The Central Bank projects an annual rate of 23.3%, BBVA Research estimates 30%, and the OECD estimates 28.4%. The big question is whether wages will be able to keep up with the pace of price increases, especially in a context of exchange rate pressure and volatile expectations.
In this scenario, some analysts believe that the evolution of mortgage loan payments also depends on external factors. A firm agreement with the IMF could help stabilize expectations and slow the rate of increases. Otherwise, the devaluation could reinforce the negative impact on household purchasing power.
Measures and recommendations
On the financial side, recent measures by the National Securities Commission (CNMV) facilitating mortgage securitization open the door to greater competition among banks. This could, in the medium term, lead to lower rates or more affordable terms.At the same time, those who already have a loan could opt to refinance if the banks allow early cancellation without penalty.
Alan Daitch , CEO of Tasa Tasa, explained that "the analysis shouldn't be limited to the amount of the first installment." It's key to evaluate how that installment will change based on inflation and consider all additional costs: insurance, bank fees, and deed fees. "Our goal is to help each person compare real-world conditions between banks and decide based on their profile," he stated.
Through the platform, which allows for installment simulations and prequalification with various banks, they have observed a sustained increase in user inquiries over the past few months. In addition to the first-time homeowner segment, they have also seen the addition of families planning local moves and small investors looking for areas experiencing appreciation.
Daitch emphasized that digitalization helps reduce barriers to accessing financing, but warned that trust in the UVA system needs to be strengthened.
For those considering taking out a loan today, those in the segment agree that it's a structural decision. Payments could extend for 20 or 30 years, so it's best to ensure they represent no more than 25 or 30% of family income.
It's also suggested considering different inflation scenarios, analyzing job stability, and checking whether the bank you choose allows early repayments.
The improved conditions of 2025 could last, but they could also be modified if the macroeconomic environment changes. Home sales prices are expected to continue to rise, albeit gradually (Illustrative Image: Infobae)
"In this context, choosing well is more important than choosing quickly," Daitch summarized. While projections show a favorable trend, Argentina's experience requires a cautious approach.
Values with an upward trend
“Housing prices have already risen from their lowest levels (in Buenos Aires, for example, apartment prices rose in 96% of neighborhoods ), so it's a good idea to look for specific opportunities and evaluate the property thoroughly before moving forward,” suggested González Rouco.Areas with lagging market values or properties with negotiable margins may offer additional advantages to those who access them with credit.
In this context, banks offer simulators and conditions that vary by institution. Comparing rates, terms, associated costs, and flexibility for early repayments is key to making more informed decisions. As mortgage lending recovers, the behavior of inflation and the exchange rate will determine the pace of installments and the true scope of financing.
"For the time being, the only way to prevent the payment increase for those who have already accessed a loan and become homeowners is for inflation to remain at zero. According to bank reports, delinquency rates in recent months have been practically zero," concluded González Rouco.
www.buysellba.com
