According to a recently published comparative study, In the long run it is more convenient to take out a UVA mortgage loan than to pay rent. “Although installments and rent evolve in the same way, the monthly mortgage loan payment ends up being higher than the rental value, with differences between 6% and 11%.” However, the difference does not seem to be significant if we take into account that the family becomes the owner of the property.” says the report from the Institute of Economics of the Argentine Business University (UADE).
In Argentina, the dream of having your own roof is often interrupted by fluctuations in the economy. At some point, the dream turned into a nightmare. Currently, with a financing term between 5 and 30 years, Banking organizations that offer loans to access the purchase of a home are multiplying. With the Rent Law repealed, more and more tenants are attracted by returning UVA credits.
If you have the initial capital to cover the percentage that is not financed – between 20 and 30 percent of the total value of the property – as well as complementary costs such as taxes, notary and buildings and that meet a series of requirements that the organizations need, The context of controlled inflation allows us to be excited about credit.
The Unit Purchase Value (UVA), which explains how the credit installments move, It is adjusted daily by the Reference Stabilization Coefficient (CER), an index prepared by the Central Bank based on the monthly change in the Consumer Price Index (CPI).
If inflation remains within the parameters set by the Government, The monthly cost of rent and allowances is getting closer and closer. In the case of traditional loans, moreover, the installments are lower at the beginning.
For his part, The price of the rent is established between the fluctuations of the CPI and the Average Salary of Stable Employees Taxes (RIP). They increase year after year, have no minimum rental period and share inflation updates with the UVA. That is, rental contracts increase in the same way as the installments of these loans.
Comparison
To make the calculation correct, another estimate that needs to be calculated is the wage adjustment. In this sense, if the price of UVA rises twice as much as the worker’s income, in just 6 months the percentage that he lives in the family budget in pesos will be ‘ go from 35 to 39 percent.
Regarding the financial options, these range from 5, 10, 15, 20, 25 or up to 30 years and interest rates vary between 4 and 8 percent as well as the variations in UVAs. Data from the Central Bank indicates a growing trend towards credit selection. Last September, the volume of loans reached a level not recorded since August 2018, when the UVAs were in full swing. However, soon after, with the acceleration of the inflation process, the devaluation and the increase in rates that led to a large increase in taxes, critical voices and those who regretted taking the debt appeared.
At that time many debtors The planned coverage contracts were implemented to extend the term of the loan and reduce the weight of the installment on declining wages.
In the historical comparison, the UADE report shows that UVA can be more favorable: for a rent of $100,000 that started in July 2022, the difference to be paid in 2024 was $19,730 for UVA credit. At this point, they emphasize the importance of considering not only the monthly payments, but also the accumulation of own funds that can increase its value over time.
2024-11-15 22:56:00
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