Salary-linked loans coming to Argentina's mortgage market

Bnamericas Published: Monday, May 16, 2016
Salary-linked loans coming to Argentina's mortgage market

Argentina's state controlled Banco Nación will next month launch a salary-linked mortgage loan product with the aim of increasing home ownership among the middle class.

The 20-year credit line will have a fixed annual interest rate of 14% in the first three years and a variable rate linked to the debtor's salary thereafter.

The main feature of the product is that the increase in the loan installment will never be larger than the salary increase, local daily La Nación reported the bank's CEO Carlos Melconian as saying.

The loan will finance up to 80% of the value of the property which must not exceed 2.5mn pesos (US$178,000). To make the new loan product as accessible as possible, borrowers will be allowed to include family members as co-debtors.

Nación expects to issue close to 21,000 of the new loan during the first year, according to the report.

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