2024-04-28 15:17:35
The Financial Policy and Regulation Board approved that the maximum rate on housing loans increases from 10.4% to 11.5%. The aim is to provide more flexibility so that financial institutions, in the midst of increasing financing costs and scarce internal liquidity, can lend to more people.
In 2023, it closed with a drop of -6.6% in the concession of mortgage credits. Between January and February 2024, the decrease deepened to 18.4% annually; according to data from central bank of Ecuador and the Bank of the Ecuadorian Social Security Institute (Biess).
One of the underlying reasons is that it had become increasingly less profitable to place housing loans at 10.4%, when the cost of raising external financing had reached 18% and the cost of raising internal financing had also increased significantly. considerable with interest rates of up to more than 10% as payment for savers’ time deposits.
Given this scenario, the Financial Policy and Regulation Board approved resolution No. JPRF-F-2024-0104 which establishes an increase in the interest rate maximum of mortgage loans from 10.4% to 11.5%.
This measure has already been in effect since March 15, 2024 and the 11.5% will remain until June 30, 2024.
Starting in July, the maximum interest rate may vary monthly as a result of a change in the calculation formula.
The effective reference active rate of the immediately preceding month will be taken into account, which corresponds to the average interest rate charged by financial entities in that month.
Joan Proaño, spokesperson for Positive Buildersrecognized that in the face of liquidity restrictions and the increasing cost of financing, financial institutions have become stricter when granting housing loans, and are privileging triple A clients.
The Board’s decision seeks to expand the granting of these credits beyond tripe A clients; but it has an adverse consequence.
It is estimated that, for every half point that the interest rate rises, around 4.5% of borrowing capacity is lost.
That is, if before it could be applied to a loan of $100,000, now it can be applied to one of $91,000.
He real estate I had a bad 2023 with a drop of more than 20% in housing reserves. We will have to wait and see what the consequences of the decision of the Financial Policy and Regulation Board are.
In addition to regular mortgage credit, there are also cheaper options, with loans below 6%, through Biess or financing with subsidized interest rates in banks and cooperatives.
By: Diario la HORA