Argentina unveils inflation-adjusted 30-year mortgages
Argentina has given the green light to highly anticipated inflation-adjusted, 30-year mortgage loans (UVA) to be offered through the nation's three state-owned banks: Nación, Provincia and Banco Ciudad.
"The public banks have to be at the service of the productive sector to maximize support for the real economy," finance minister Luis Caputo said in a statement.
Leading up to the launch, officials built up demand by lowering the required monthly payment, which will vary by bank and client status.
Nación will apply an annual interest rate of 3.5% for clients and 4.5% for non-clients, estimating a monthly payment of roughly 5,000 pesos (US$320) per 1mn pesos borrowed.
For Banco Provincia, the monthly payments will be slightly higher at 5,931 pesos, and Banco Ciudad will offer the 30-year loan at 5.9% with the payment set around 5,990 pesos.
"These are not subsidized loans, rather they are the product of having exited the currency and default crunch and having obtained the lowest rates in history," said Caputo at a press conference, as reported by local outlet La Nación.
Provincia director Javier González Fraga was quoted as saying: "We are facing a scenario where the people are recovering confidence, which can be seen in the increase in the number of people acquiring loans." He cited a surge in car loans authorized under the UVA scheme introduced in April 2016.
Applicants must earn the equivalent of four minimum wage incomes per month - either individually or as a household, which would amount to about 32,000 pesos at the current level.
The mortgage loan may only be applied for the purchase of a physical dwelling for permanent residence, and the maximum for the loans is set at US$200,000, where the amount in pesos will vary by the exchange rate.
The banks can only loan up to 80% of the property's value.
The government is also working to make mortgage loans tax exempt from the gross income tax charged by most provinces.
Opening private banks and expanding mortgage lending are also two key goals for central bank governor Federico Sturzenegger.
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