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Mortgage loans in Argentina: the UVA factor, comparison of rates with the region and the risks to assess - Ambito Financiero
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www.ambito.com
November 19, 2025
By José Luis Cieri
Loans have revived real estate demand. Investors and families are evaluating indexed loans: Is it a shift in the economic system or a window of opportunity?
A young woman signs the deed to her apartment in Buenos Aires with a UVA mortgage loan, taking advantage of the window of opportunity offered by indexed financing.Pexels
The Argentine real estate market is experiencing a resurgence driven by mortgage lending. After years of stagnation, the reappearance of financing lines indexed to Purchasing Power Units ( UVA ) is awakening a long-dormant demand, eager for leverage.
However, the central debate revolves not only around the initial accessibility of the quota, but also around the regional comparison: the UVA system, a technical mechanism similar to the Chilean or Uruguayan one, faces the challenge of chronic local economic instability.
What's relevant for the sector right now is the recovery in sales driven by mortgage lending, which represents an average of 21% of transactions . In the City of Buenos Aires, over the last few months, more than 5,500 deeds were registered monthly , of which about 1,300 were financed; in the province of Buenos Aires , 13,000 deeds were registered monthly , with approximately 2,500 transactions backed by loans.
He added: "In the region, the logic is similar: the installment is updated by inflation plus a fixed or semi-fixed real rate . Argentina uses the UVA, Chile the UF (Unidad de Fomento) and Uruguay the UI (Unidad Indexada). In all cases, the idea allows the initial installment to be low and the credit accessible."
The fundamental difference lies in the inflationary film that runs behind these systems.
In essence, the UVA's design is not "bad"; its efficiency is negated by Argentina's inflationary volatility. In the rest of Latin America, the mortgage payment rises gradually, in line with wages and prices, while in Argentina the UVA's rate of increase has consistently outpaced income growth.
"The insane risk is the outstanding principal, not the installment. If you owe 10,000 grapes and tomorrow there is 100% inflation, you owe double the amount because you owe the same number of grapes that you haven't paid off," Magnin explained.
According to Daniel Bryn, there are three specific risks that the debtor assumes:
Magnin qualifies the situation with a market perspective. He argued that for a salaried worker, if the person already pays rent, replacing that expense with a loan payment does not represent a "delirious" risk.
His key recommendation revolves around employability : "If you get fired tomorrow, will you find another job in a month or two? If you think you'll find one, then for me, taking out a UVA loan isn't that risky."
Rates, salaries, and doing the math right are key to getting a mortgage in ArgentinaPexels
Inflation expectations are therefore the deciding factor. If the buyer is confident in sustained disinflation, the loan is attractive: the monthly payment becomes more manageable over time, and the property appreciates in value in dollars (creating a win- win situation). If, on the other hand, they fear a new surge in cases, the loan is perceived as too risky.
"If inflation were to converge to a stable 5-7% annually, we would be talking about a real cost that is somewhat higher than in Chile/Uruguay, but reasonable. The difference is that we are coming from triple-digit inflation and there is uncertainty about convergence," Bryn stated.
In theory, Argentina's real interest rate could be competitive regionally. What raises the risk is the volatility and lack of confidence in the future of the currency and the economy.
Barrera observes that the perception that current values are at historically low levels is putting decisions on hold. The first movements are concentrated in small units in the City of Buenos Aires (one and two rooms), which react first in recovery cycles.
"If stability is maintained, prices should recover. And that calculation is activating investors who see a limited window of opportunity," Barrera said.
For credit to be massive and "middle class", the system requires four macroeconomic conditions, which are not technical, but about trust: low and predictable inflation (no more than a low single digit), wages that at least keep pace with inflation , clear long-term rules (without patches or freezes) and confidence in economic policy so that people will take out loans for 20 or 30 years.
Finally, financing will be crucial for demand to exceed the number of those with immediate access to funds. Barrera concluded that "only in this way can the market expand. It is imperative that stability be maintained so that this window of opportunity becomes a permanent gateway to the dream of homeownership."
www.buysellba.com
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Créditos hipotecarios en la Argentina: el factor UVA, comparación de tasas con la región y los riesgos a evaluar
Préstamos reactivaron la demanda inmobiliaria. Inversores y familias evalúan el crédito indexado: ¿es un cambio de régimen económico o una ventana de oportunidad?
www.ambito.com
November 19, 2025
By José Luis Cieri
Loans have revived real estate demand. Investors and families are evaluating indexed loans: Is it a shift in the economic system or a window of opportunity?
A young woman signs the deed to her apartment in Buenos Aires with a UVA mortgage loan, taking advantage of the window of opportunity offered by indexed financing.Pexels
The Argentine real estate market is experiencing a resurgence driven by mortgage lending. After years of stagnation, the reappearance of financing lines indexed to Purchasing Power Units ( UVA ) is awakening a long-dormant demand, eager for leverage.
However, the central debate revolves not only around the initial accessibility of the quota, but also around the regional comparison: the UVA system, a technical mechanism similar to the Chilean or Uruguayan one, faces the challenge of chronic local economic instability.
What's relevant for the sector right now is the recovery in sales driven by mortgage lending, which represents an average of 21% of transactions . In the City of Buenos Aires, over the last few months, more than 5,500 deeds were registered monthly , of which about 1,300 were financed; in the province of Buenos Aires , 13,000 deeds were registered monthly , with approximately 2,500 transactions backed by loans.
Indexed credit: a regional axis with critical differences
Indexed loans, where the outstanding principal and installments are adjusted for inflation, are not an Argentine invention. On the contrary, they form the basis of mass mortgage financing in several countries in the region, as explained by Daniel Bryn , a real estate market analyst at Zipcode.He added: "In the region, the logic is similar: the installment is updated by inflation plus a fixed or semi-fixed real rate . Argentina uses the UVA, Chile the UF (Unidad de Fomento) and Uruguay the UI (Unidad Indexada). In all cases, the idea allows the initial installment to be low and the credit accessible."
The fundamental difference lies in the inflationary film that runs behind these systems.
- Chile (Unidad de Fomento - UF): Inflation remains low and stable (generally 2-4% annually). Real interest rates are relatively low (4-5% annually in UF), and loan terms extend to 20-30 years. The result is a widespread and culturally accepted system because indexation does not generate shocks .
- Uruguay (Indexed Unit - UI): Maintains moderate inflation (around 4-6% annually). UI interest rates hover around 3.8-4.5% in real terms. The predictability of inflation ensures that the adjustment of the installment is smooth and expected.
- Peru/Paraguay (some products): These also offer indexed or mixed loan schemes. They combine loans in local currency with relatively higher interest rates, and some indexed lines of credit. In general, inflation is more controlled than in Argentina, making the monthly payment predictable in real terms.
- Argentina (UVA): It uses the same technical concept (installment indexed to inflation plus an additional rate), but the adjustment follows an inflation rate that has historically been extremely high and volatile . "The UVA is adjusted with inflation that was already very high, and even if your 'real' rate is, for example, UVA + 7.5% , what's frightening is the indexation if inflation heats up again," Bryn summarized.
In essence, the UVA's design is not "bad"; its efficiency is negated by Argentina's inflationary volatility. In the rest of Latin America, the mortgage payment rises gradually, in line with wages and prices, while in Argentina the UVA's rate of increase has consistently outpaced income growth.
Risks and the impact of inflationary expectations
Today, buyers who take out a UVA loan assume risks that go beyond the financial cost. Santiago Magnin , from Deinmobiliarios and a real estate expert, emphasized that, while the monthly payment remains pegged to the rental value, the main risk lies in the outstanding principal ."The insane risk is the outstanding principal, not the installment. If you owe 10,000 grapes and tomorrow there is 100% inflation, you owe double the amount because you owe the same number of grapes that you haven't paid off," Magnin explained.
According to Daniel Bryn, there are three specific risks that the debtor assumes:
- Risk of Income-UVA Mismatch: If inflation rises and wages don't keep pace, the mortgage payment will increase faster than the salary. This is the main risk .
- Risk of Inflationary Shock : A sudden price jump or a sharp devaluation can cause the UVA to skyrocket in a few months, significantly affecting those who start the loan with a high balance.
- Political/Regulatory Risk: The possibility of rule changes, freezes or "patches" that do not offer clarity or long-term security for the debtor or the banking entity.
Magnin qualifies the situation with a market perspective. He argued that for a salaried worker, if the person already pays rent, replacing that expense with a loan payment does not represent a "delirious" risk.
His key recommendation revolves around employability : "If you get fired tomorrow, will you find another job in a month or two? If you think you'll find one, then for me, taking out a UVA loan isn't that risky."
Rates, salaries, and doing the math right are key to getting a mortgage in ArgentinaPexels
Inflation expectations are therefore the deciding factor. If the buyer is confident in sustained disinflation, the loan is attractive: the monthly payment becomes more manageable over time, and the property appreciates in value in dollars (creating a win- win situation). If, on the other hand, they fear a new surge in cases, the loan is perceived as too risky.
Actual cost and the window of opportunity
If we analyze the real financial cost (the rate paid above inflation), the Argentine UVA is not so far behind its peers. While Chile and Uruguay have real interest rates in UF/UI of between 3.8% and 5% annually, a typical UVA loan today has a fixed rate of around UVA + 7.5% ."If inflation were to converge to a stable 5-7% annually, we would be talking about a real cost that is somewhat higher than in Chile/Uruguay, but reasonable. The difference is that we are coming from triple-digit inflation and there is uncertainty about convergence," Bryn stated.
In theory, Argentina's real interest rate could be competitive regionally. What raises the risk is the volatility and lack of confidence in the future of the currency and the economy.
Activity
Despite the risks, the real estate market is picking up. Pablo Barrera , team leader and commercial manager of Alto Grande Desarrollos and M&M Propiedades, believes the market is going through "a phase of renewed activity based on expectations of stability and increased property value . "Barrera observes that the perception that current values are at historically low levels is putting decisions on hold. The first movements are concentrated in small units in the City of Buenos Aires (one and two rooms), which react first in recovery cycles.
"If stability is maintained, prices should recover. And that calculation is activating investors who see a limited window of opportunity," Barrera said.
For credit to be massive and "middle class", the system requires four macroeconomic conditions, which are not technical, but about trust: low and predictable inflation (no more than a low single digit), wages that at least keep pace with inflation , clear long-term rules (without patches or freezes) and confidence in economic policy so that people will take out loans for 20 or 30 years.
Finally, financing will be crucial for demand to exceed the number of those with immediate access to funds. Barrera concluded that "only in this way can the market expand. It is imperative that stability be maintained so that this window of opportunity becomes a permanent gateway to the dream of homeownership."
www.buysellba.com
