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Mortgage loans: Banks are raising rates again, and they have already increased by more than 20% since they were launched - La Nacion Propiedades
May 16, 2025
By Candela Contreras
Access to housing through credit remains a possibility limited to a specific segment and each rate increase is a door that closes.
By Candela Contreras
Since they were launched in April 2024, mortgage loans from several banks have raised their rates.Inna Kot - Shutterstock
Twelve banks have again raised their UVA (Purchasing Value Unit) mortgage rates . And while the news doesn't surprise the sector, it does raise red flags. The upward trend began to become evident between November and December 2024, and since then, some banks have already implemented their third or fourth rate increases .
What is the impact of these increases? Loans are becoming more expensive , and the number of people who can afford to own their own homes is shrinking.
In the case of UVA loans , whose rates are adjusted for inflation according to the CER index , the rate hike is particularly noticeable. While the indexation system makes these loans a viable option in inflationary contexts, interest rate increases can increasingly restrict access to loans .
The big question that arises in this scenario is: How much does a rate hike make a mortgage payment more expensive?
"The amount of a mortgage loan payment will be more impacted by the rate offered by the bank than by the term applied for," explains José Rozados, director of Reporte Inmobiliario. The higher the rate, the higher the income the applicant must prove , since, due to bank conditions, the down payment cannot exceed 25% (and in some cases up to 30%) of the family income. Therefore, as the rate increases , the amount of the down payment also increases , so a higher demonstrable income will be required. This is the point that can make a person unable to qualify.
Rates currently average 4.9% for public or provincial banks , while private banks have already climbed to 7.8%, up from 5.5% initially, according to the consulting firm Empiria. This means an increase in the down payment (and required income) of more than 23% for a 25-year loan.
A clear example of what this increase represents would be the following, for a $100 million loan in one of the 25-year lines :
However, it should be noted that the average agreed-upon rate (for loans granted) in April was 5.8% , which reveals strong participation by institutions like Banco Nación, which continues to offer more affordable terms than other institutions.
The average agreed rate - that of the loans granted - in April was 5.8%.Freepik photo available on freepik
Federico González Rouco, an economist specializing in housing, interprets the phenomenon as a natural response to the imbalance between supply and demand : "There is a huge demand that grew very quickly, and at the same time, funding mortgage loans is expensive for banks because they involve loans with very high ticket prices," he notes. "The structural solution should involve tools such as portfolio titling or securitization , but in Argentina, these don't exist: it requires a level of financial sophistication that is far from the present."
Magdalena Day, director of the Mday Group, who was present at Expo Construir, agrees: " Without securitization, banks don't want to lend money . The interest-to-income ratio is extremely strong, so we can't do anything with it. If the credit market doesn't develop, it's very difficult for prices to recover."
In reality, many private banks have no interest in lending. But faced with the pressure of demand, they end up offering and granting credit ... albeit at higher rates . The increase acts as a filter: it restricts the entry of new applicants and limits the bank's exposure. According to industry sources, Banco Nación and Banco Galicia currently account for the majority of mortgage lending , with the latter already having granted more than 5,000 loans.
Esteban Domecq, economist and director of Invecq, maintains that the underlying problem remains macroeconomic instability : “In the first months of the year, there was a new bout of instability that led to interest rate hikes. For mortgage lending to take off, sustained low inflation is needed —from 2% or 3% monthly to zero. There can't be inflationary rebounds because all of that directly affects it.” He also warns that “if inflation drops and the economy stabilizes, interest rates will do so as well. We should move toward mortgage rates of 5% to 8%, as they were six months ago.”
The rate increase means an increase in the down payment (and the required income) of more than 23%.SaiArLawKa2 - Shutterstock
The question now is whether rate hikes will continue to affect the mortgage market or whether the lifting of restrictions will lead to banks beginning to find more affordable conditions to sustain the recovery. In an inflationary context, where UVAs represent the only viable option, the evolution of rates will be key to determining the future of the sector .
www.buysellba.com
May 16, 2025
By Candela Contreras
Access to housing through credit remains a possibility limited to a specific segment and each rate increase is a door that closes.
By Candela Contreras
Since they were launched in April 2024, mortgage loans from several banks have raised their rates.Inna Kot - Shutterstock
Twelve banks have again raised their UVA (Purchasing Value Unit) mortgage rates . And while the news doesn't surprise the sector, it does raise red flags. The upward trend began to become evident between November and December 2024, and since then, some banks have already implemented their third or fourth rate increases .
What is the impact of these increases? Loans are becoming more expensive , and the number of people who can afford to own their own homes is shrinking.
In the case of UVA loans , whose rates are adjusted for inflation according to the CER index , the rate hike is particularly noticeable. While the indexation system makes these loans a viable option in inflationary contexts, interest rate increases can increasingly restrict access to loans .
The big question that arises in this scenario is: How much does a rate hike make a mortgage payment more expensive?
"The amount of a mortgage loan payment will be more impacted by the rate offered by the bank than by the term applied for," explains José Rozados, director of Reporte Inmobiliario. The higher the rate, the higher the income the applicant must prove , since, due to bank conditions, the down payment cannot exceed 25% (and in some cases up to 30%) of the family income. Therefore, as the rate increases , the amount of the down payment also increases , so a higher demonstrable income will be required. This is the point that can make a person unable to qualify.
Rates currently average 4.9% for public or provincial banks , while private banks have already climbed to 7.8%, up from 5.5% initially, according to the consulting firm Empiria. This means an increase in the down payment (and required income) of more than 23% for a 25-year loan.
A clear example of what this increase represents would be the following, for a $100 million loan in one of the 25-year lines :
- With a rate of 5.5% , you need an income of $2,456,349 to qualify and the first installment is $614,087.
- Now, with the rate increase to 7.8% , those numbers increased to $ 3,034,457 (income) and $758,614 (first installment).
However, it should be noted that the average agreed-upon rate (for loans granted) in April was 5.8% , which reveals strong participation by institutions like Banco Nación, which continues to offer more affordable terms than other institutions.
The average agreed rate - that of the loans granted - in April was 5.8%.Freepik photo available on freepik
Federico González Rouco, an economist specializing in housing, interprets the phenomenon as a natural response to the imbalance between supply and demand : "There is a huge demand that grew very quickly, and at the same time, funding mortgage loans is expensive for banks because they involve loans with very high ticket prices," he notes. "The structural solution should involve tools such as portfolio titling or securitization , but in Argentina, these don't exist: it requires a level of financial sophistication that is far from the present."
Magdalena Day, director of the Mday Group, who was present at Expo Construir, agrees: " Without securitization, banks don't want to lend money . The interest-to-income ratio is extremely strong, so we can't do anything with it. If the credit market doesn't develop, it's very difficult for prices to recover."
In reality, many private banks have no interest in lending. But faced with the pressure of demand, they end up offering and granting credit ... albeit at higher rates . The increase acts as a filter: it restricts the entry of new applicants and limits the bank's exposure. According to industry sources, Banco Nación and Banco Galicia currently account for the majority of mortgage lending , with the latter already having granted more than 5,000 loans.
Esteban Domecq, economist and director of Invecq, maintains that the underlying problem remains macroeconomic instability : “In the first months of the year, there was a new bout of instability that led to interest rate hikes. For mortgage lending to take off, sustained low inflation is needed —from 2% or 3% monthly to zero. There can't be inflationary rebounds because all of that directly affects it.” He also warns that “if inflation drops and the economy stabilizes, interest rates will do so as well. We should move toward mortgage rates of 5% to 8%, as they were six months ago.”
The rate increase means an increase in the down payment (and the required income) of more than 23%.SaiArLawKa2 - Shutterstock
The banks that raised their rates
- Bancor : has already raised its rate from 4.9% to 6.9% for payroll account customers and reduced property financing from 100% to 75%. A new increase is underway , bringing the rate to 8.9% for current customers and 9.9% for non-customers.
- BBVA : Increased the interest rate from 5.5% to 6.5% for payroll account holders in the first period, and in February, raised it again to 6.9% . The APR then rose to 8.5% and 10.5% , respectively, for payroll account holders and non-payroll account holders. It now stands at 9.5% and 12.5%. This bank is undergoing its third rate increase since the launch of its credit line.
- Comafi : increased the rate to 6.25% for payroll accounts (previously 5.5%) and to 8% for non-payroll accounts (previously 7.5%).
- Credicoop : increased the rate to 7.5% (previously 5.5% ) for customers with deposits in the bank and to 8.5% (previously 6.5% ) for those without a payroll account.
- Galicia : In the first increase, the rate increased from 5.5% to 7% for payroll accounts and from 7.5% to 9% for non-payroll accounts. It currently stands at 8% for payroll accounts and 10% for non-payroll accounts.
- Petersen Group Banks (San Juan, Santa Cruz, Santa Fe, and Entre Ríos): increased the rate from 5.5% to 6.5% for payroll accounts and from 7.5% to 8.9% for non-payroll accounts.
- Macro : In this case, the first increase in November of last year was 6.5% for payroll accounts ( previously 5.5% ) and 8% for non-payroll accounts ( previously 7% ). The new increase brought the rate from 6.5% to 8% for payroll accounts—up to $400 million—and from 8% to 9.5% for non-payroll accounts; while for higher amounts, the APR is 10% for payroll accounts and 10.75% for non-payroll accounts.
- Patagonia : In December, the maximum amount increased from $250 million to $320 million, with a rate that went from 4.9% to 5.4% , and in February, they raised the rate again, bringing it to 6.5% . The latest increase brought the rate to 8.5% for payroll accounts and 9.9% for non-payroll accounts; this is the fourth increase.
- Santander : This is the second time it has raised its fixed rate. The initial increase was from 5.5% to 7% ; now it stands at 9.5% .
The question now is whether rate hikes will continue to affect the mortgage market or whether the lifting of restrictions will lead to banks beginning to find more affordable conditions to sustain the recovery. In an inflationary context, where UVAs represent the only viable option, the evolution of rates will be key to determining the future of the sector .
www.buysellba.com
