Acquiring a home in Chile through a mortgage loan has become more complex. In addition to the increases in interest rates, banks tightened minimum income requirements to access credit.
According to a study carried out by the platform MiMejorTasa.cl, in the last 12 months there was an increase of more than 10% in the salaries required for a mortgage loan.
As an example, for a loan of UF 3,000 with a 20-year term and with a 20% interest rate, an income of $2,535,210 is currently required, a figure that is 9.6% more than in 2022 or an extra $221,132.
The situation is repeated in the case of a loan with similar characteristics, but with a term of 25 years: a salary of at least $2,277,449 is needed, which is 10.3% more than last year.
The scenario is similar for mortgages of UF 6,000. In a loan of this amount for 20 years and with a 20% interest rate, today the bank is asking for a minimum income of $5,029,541, registering an increase of $429,129 in one year, equivalent to an increase of 9.3% .
The same credit, but with a term of 25 years, had a 10.2% increase in the minimum income required, reaching the requested amount of $4,540,383.
The income demands by the banks have grown above the inflation of the last 12 months, which is 4.5%, and above the nominal remuneration index – which measures the evolution of salaries with an adjustment for monthly variation of the CPI – which in October was 8.7% in the last year.
Rising rates
Additionally, the first week of December began with an average annual interest rate in UF for a mortgage loan of 5.24%, levels that had not been observed since March 2009.
In the industry, interest rates even exceed 6%, according to the data provided in the mortgage loan simulator of the Financial Market Commission (CMF) for a loan of UF 3,000 with a 20-year term. This happens with Scotiabank and Santander.
The Canadian bank appears offering a rate of 6.25% and demanding a monthly dividend of $838,747 from clients. While the Spanish firm leads with the highest rate in the market – in this simulation – with 6.50% and a dividend of $844,253.
On the other side is Coopeuch, which offers the lowest rate in the industry with 4.69% and a monthly dividend – which includes credit and fire insurance – of $729,729.
Thus, the difference between the lowest market offer and the highest gives a gap of 181 basis points in the interest rate and $114,524 in the dividend.
The executive director of Colliers, Jaime Ugarte, pointed out that given the evolution of mortgage loan rates, which have shown an upward trend, “a financial system is perceived that is not competing for the quantity of placement, but for the quality of the debtors. “.
He added that this explains the greater demands to obtain credit. “By increasing the dividend, the income requirement increases and, additionally, salary requirements increase more than proportionally,” mentioned the executive director of Colliers.
Outlook for 2024
Regarding projections on how the interest rate for mortgage loans will evolve during 2024, there is caution in the industry.
The director of Tinsa for the southern cone, Felipe García, indicated that he projects that the first half of next year will have a similar trend to the end of 2023.
García added that “it will be vitally important to have an economic environment with better general indicators, for example, growth or inflation.”
Meanwhile, the executive director of Colliers pointed out that the interest rate for mortgage loans should begin to fall from the second quarter of next year. This, taking into consideration that the Central Bank’s monetary policy rate will decrease and inflation should converge to the authority’s goal.
The executive director of Enlace Inmobiliario, Sergio Barros, added that the United States Federal Reserve is also projected to begin applying cuts to its rate, which “would cause mortgage rates in Chile to experience a decrease, although moderate, next year.” “.
Despite this, the regional director of RE/MAX Chile, Yuval Ben Haym, stated that “we cannot expect many changes compared to 2023. Growth has been little or nothing in Chile, despite the fact that the Central Bank rates have gone going down”.
Ben Haym considered that the new housing industry will continue to be under pressure over the next year and does not foresee substantial changes.
Source: DF
Associated categories
Social Security in Chile: Economy
2023-12-22 13:33:38
#Minimum #income #required #mortgage #loan #grows #rates #exceed #CIEDESS
