Mortgage credit | Withdrawals of up to 25% from AFP to buy a home, who is after this benefit? | ECONOMY

2023-07-19 17:10:22

Accumulated as of April 30, 2023, a total of 115,609 affiliates made use of this benefit for a total of S/ 3,446 million, according to SBS data. The number of affiliates who made the 25% withdrawal represents 1.27% of the total affiliates in the SPP (9’073,461a that month).

The regulation in question allows two options for the acquisition of a first home: the payment of the initial installment of the mortgage loan and the amortization of that loan.

Thus, it can be seen that 74,014 affiliates used the 25% withdrawal from their AFP to repay a mortgage loan (64%) and 41,595 affiliates made the withdrawal to pay the initial installment of the mortgage loan (36%).

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Who made the withdrawals?

It is observed that with a 25.1% participation, affiliates between 36 and 40 years of age (29,057) are the ones who made the most withdrawals of 25% of their AFP to buy a home. Of these, 19,425 affiliates amortized the mortgage loan and 9,632 used the resources of the pension fund for the initial installment of a home loan.

Then there is the group of affiliates between 41 and 45 years of age (21.2%); followed by the group between 31 and 35 years (19.7%).

At the other extreme, only 64 affiliates over 65 (0.1% of total affiliates) used 25% of their pension fund to purchase their first property.

Meanwhile, by AFP, it can be seen that AFP Prima affiliates were the ones who used their pension funds the most to acquire a property (42,115), followed by AFP Integra (39,873), AFP Profuturo (25,777) and AFP Hábitat (7,884).

Impact on pension

Raúl Villacorta, Macroconsult economist, pointed out to Gestión that the 25% withdrawal for a home does not have a pension purpose, so the logic of the pension system is broken. He said that those members who made use of these pension funds would be exposed to a lower pension when they reach retirement age (65 years).

“There will be an impact on those who made the withdrawal (from their AFP funds) because they are changing a tool to save for old age for a different tool and one that does not make both savings and pension funds profitable. [¿Cuánto menos recibirán de pensión por jubilación?] This will depend on many variables, but in any case there is a differential”, he pointed out.

He added that the retirement pension will also vary if other significant withdrawals were made. As recalled, during the COVID-19 pandemic, extraordinary withdrawals of AFP funds were approved. To date, six withdrawals have been approved.

Villacorta also explained that when 25% of the funds are withdrawn, the profitability of the pension fund is exchanged for the profitability of the housing market.

ALSO READ: AFP must apply new reserves for excess investment in their portfolios.

On the contrary, the professor of the ESAN Finance area, Arturo García, considered this alternative positive, since the retirement is destined to a house, one of the most important expenses that a worker has throughout the work period, even when he is retiring.

“When the worker retires, he is an older adult and needs income. One of the ongoing expenses that he will have is housing, so by having his own home he will no longer pay rent. In that sense, he is a good option, ”he said.

García also recalled that the Multisectoral Commission -which includes the Ministry of Economy and Finance (MEF), Ministry of Labor and Employment Promotion, Banco Central de Reserva, SBS- in its proposal to reform the pension system, maintains withdrawals from the 25% of the fund to pay the down payment or repay a mortgage loan.

Amortization and procedures

The Head of Prima AFP Agencies, Gina Gamboa, told Gestión that in the case of the amortization of an initial installment, the affiliate cannot necessarily make use of the entire percentage allowed in a single process (25%). As she indicated, in the first step the member can request a lower percentage and years later, with a greater accumulated fund, request the remainder.

“If 15% or 18% of your AFP was withdrawn the first time, you can accumulate the difference and then you can access the benefit again, until you reach that 25%,” he said.

This scheme -he clarified- does not apply to the payment of the initial installment of a mortgage loan, so that the withdrawal of up to 25% is allowed in a single process.

Gamboa pointed out that both for the amortization and for the payment of the initial installment of the mortgage loan, the affiliate must present his AFP account statement to his financial institution and, based on this, calculate the 25% withdrawal. In the case of the initial fee, the affiliate must have an approved mortgage loan to access this benefit.

Once the financial entity receives the account statement, it must validate it and if it does not have to correct any information, the entity must grant it a document called “pre-compliance letter” and proceed with the process.

“When the ‘pre-compliance letter’ is available, the 25% withdrawal process has already begun. When you have that document, the recommendation is not to stop communicating to your AFP so that it can start with the withdrawal. This letter is valid for 60 days, so this period cannot be missed, ”he pointed out.

The entire process of this withdrawal has a period of 17 days and the transfer of the approved amount is made between the AFP and the financial institution.

ABOUT THE AUTHOR

Degree in journalism from the Technological University of Peru. Since 2019, she has been part of the Gestión newspaper. She has experience in audiovisual communication, written and digital press.

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