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Luis Caputo led the announcement of new 30-year mortgage loans

The Minister of Finance presented the coordination policy of public banks to foster growth and employment creation.

March 23, 2017

The Minister of Finance, Luis Caputo, presided a meeting this afternoon with journalists of graphical media to announce, together with the presidents of the three public banks, the new policy to promote credit. Within that framework, Javier González Fraga (Banco Nacion), Juan Curutchet (Banco Provincia) and Javier Ortiz Batalla (Banco Ciudad) presented the main characteristics of the credits for access to housing that public banks will offer for the middle-class sectors.

Minister Caputo highlighted that “public banks have to serve the productive sector and to maximize the contribution to the real economy; that is the objective we are pursuing, in this case with mortgage credits”.

The Minister of Economy of the Province of Buenos Aires, Hernan Lacunza, and the Ministry of Treasury of the City of Buenos Aires, Martin Mura, were also present. They announced the submission of a Bill to reduce Gross Income Tax a 1.5% for the mortgage credits of their respective jurisdictions in every bank.

Credits aimed at housing acquisition may be cancelled in a period of up to 30 years: 360 installments that will be adjusted by Purchasing Power Unit (UVA, for its acronym in Spanish) and it will develop according to the Consumer Price Index.

In that sense, Caputo highlighted: “This process of credit recovery that began at the end of last year will have an enormous impact with these mortgage credits that are now part of Procrear, and we are going to develop an even greater market once private banks come into scene”.

Public banks will finance between the 75% and the 85% of the real property value, up to ARS3,1000,000 in the case of Banco Nacion; Banco Ciudad won´t have any limit regarding the real property value and it will lend up to ARS2,000,000 for the acquisition of used and new houses; and Banco Patagonia ARS2,700,000.

In order to access a million-pesos credit, a family group will need incomes between ARS18,500 and ARS24,000, respecting an installment-income relation that varies between the 25% and 30%.

In this sense, Gonzales Fraga said: “For the same cost of a rent, we are giving a family the opportunity to become owners and this is a different Argentina”. Likewise, Ortiz Batalla highlighted: “The 31% of UVA credits nowadays is given by Banco Ciudad and this initiative becomes part of it and it is mainly for the middle-class sector. Nevertheless, the mortgage credit is below 1% of the total product, we have a long path to walk”. On his part, the head of Banco Provincia said that “public banks must play a social role, it is the objective of our institution and of the Governor of the Province, and we have the opportunity to materialize it in the mortgage credit”.

The rates and the amounts of the installments also vary according to each bank. Banco Nacion will apply an interest rate of 3.5% for its clients and of 4.5% for the rest of the public, and it is estimated that the monthly installment will range between ARS4,600 and ARS5,000 for every million pesos lent. In the case of Banco de la Provincia de Buenos Aires, the installment for every million pesos will be around ARS5,931 for its clients with a preferential rate of 5.9% and a rate of 7.5% for the rest of the public. In Banco Ciudad, with an interest rate of 5.9%, beneficiaries will pay an installment of approximately ARS5,993.

Banco Ciudad will have the information available as from next Monday and Banco Nacion and Banco Provincia in the following weeks.