The increase in the UF and its impact on mortgage loans | Digital medium The Northern Fox

Loans have been affected by various variables. USM expert explains in detail the incidences of the increase in the acquisition of a home.

The increase in the cost of living has been a constant concern in recent months in our country, with the real estate industry being one of the most affected by this situation.

With the persistent rise in the Consumer Price Index (CPI), presented in recent months and which, in March, registered an increase of 1.9%, accumulating 9.4% in the last twelve months, an increase in the cost of living with a series of effects on people. This, not only in those that are paying a mortgage dividend, since those contracts are fixed in UF, but also in those that lease and have contracts denominated in UF or with readjustments according to the CPI.

The indicators for April 9 of this year, the date on which the UF was adjusted to the CPI of the previous month; the UF reached $31,755 but, after the March CPI, the UF should rise to $32,358 in May. “Now, if we study the evolution of the last twelve months, the rise has not been minor. For example, on April 9, 2021, the UF was at $29,529 and comparing it to the same period this year, a rise of $2,829 is reflected.”

“If we consider an average mortgage loan of UF 4,000, the change has also been important. If a year ago, for a property of UF 4,000, that value corresponded to $111,647,320, by May 9 of this year, when the IPC is applied, those UF 4,000 will reach $129,434,766. In other words, in 13 months the value of a UF 4,000 home will have increased by $17,787,446”, indicates the professor of the USM Department of Commercial Engineering, Carolina Erices.

The expert also indicates that if the dividends of a house of UF 4,000 are considered, with a mortgage loan, for example, with a 20-year term, at a fixed rate and with a foot of 20% of the value of the property, the average dividend that banks currently offer is approximately $775,000, but with the new value of the UF, that amount could reach $790,000.

sustained gains

The interest rate on mortgage loans completed 11 months of consecutive increases, reaching figures not seen since 2019. The Central Bank in its Monetary and Financial Statistics report corresponding to March 2022, delivered that the average interest rate on loans mortgages during the period was 4.45%, rising six basis points compared to February of the same year and reaching its highest level since August 2013.

“The foregoing reflects a slowdown in housing credit that was being observed in the first months of 2022 and that is part of an economic context with a high interest rate. A key player has been the Central Bank, recently announcing a rate hike from 5.5% to 7% and warning of double-digit inflation in the short term. Thus, from October 2021 to the last week of March 2022, there have been four significant increases in interest rates,” said the expert.

One of the central economic concerns for the local economy is, without a doubt, the recent evolution of inflation, given that expectations for the next two years have remained high and above the inflation target, with respect to to the usual horizons which are of the order of 3% per year.

Additionally, the external scenario does not help contain inflation. The invasion of Ukraine by Russia shocked the commodity markets and, together with the international sanctions imposed on Russia, are affecting the world food industry, raising the prices of food and hydrocarbons, key elements in the basic baskets. of all the world.

“The rise in prices worldwide is also explained by the consequences of the pandemic, which brought a series of factors that began to generate a rise in prices. along with ratifying that the annual variation of the IPC will approach 10%. Thus, by the middle of this year, it is projected that annual inflation will reach an average of 8.2%, although some believe that it should close at close to 5.6%, considering the effect of the increases in the Monetary Policy Rate ( TPM). With this, the objective of redirecting inflation to levels of 3% would only be achieved at the beginning of 2024,” Erices said. “Fiscal policy has to maintain a trajectory that advances towards closing the structural deficit of the public balance, so it is essential to avoid greater spending. and generate future growth capacity, speeding up private investment and entrepreneurship to increase the country’s future growth capacity”, concluded the USM expert.

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The increase in the UF and its impact on mortgage loans | Digital medium The Northern Fox

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