After years of no offer, in recent weeks the different banks, both private and public, They reactivated mortgage loans GRAPEthat They allow financing up to 75% of the sale value of a property. Repayment terms range between 5 and 30 years, annual rates vary between 3.5% and 9.5%, and fees are adjusted for inflationsince the unit of measurement is tied to the Consumer Price Index (CPI).
Now, taking into account that the fee is adjusted for inflation, the question is inevitable: Is it convenient to take a UVA mortgage loan or could it become a debt that is impossible to afford?
In this context, the economist and housing specialist Federico González Roucohe stated in dialogue with Ambit that The problem with UVA mortgage loans is not only the trend of inflation, but also that of “income”. In recent years, not only has the price increase skyrocketed, but also the recovery of real salaryanother of the variables affected by the economic crisis, was left behind in many cases.
UVA mortgage loans: a traumatic experience?
In Argentina, there was already an experience with UVA mortgage loans during the presidency of Mauricio Macribetween 2017 and 2018, since with the inflationary acceleration, by 2019 they had practically disappeared.
“There is a problem that fees rose more than income. That’s why I say, it’s just another income problem.”, assured González Rouco. When consulted by UVA mortgage holders, who were asking for legislation to regulate the fee they paid, the economist noted that “There are no people who are not paying the fee, the default rate is 1%”, regarding the last survey of mortgage holders. “There are poorer people. It is the same situation of someone who is paying rent and if before it required a certain percentage of the salary, today it is higher,” he said.
Furthermore, he stated that “there are no embargoes”since if there is a person who finds it very difficult to comply with the mortgage loan, they try to pay it by taking another loan and may even sell the property, but it is not “embargoed for life”.
Is the UVA mortgage loan convenient?
“Currently it is impossible to acquire a house if you do not have the option of a loan and the UVA mortgage loan is the only possible financing,” said the specialist and equated the indexation of loans with that of rents: “It is similar to rents, only they are indexed quarterly,” he noted.
Hence, for González Rouco, this tool is “convenient”, but it also carries different “risks”. “It is exposed to inflation and especially to salary variations.. If someone starts paying a loan at the age of 28, it is possible that their salary outlook will improve from now on. But if you start at 40, surely the professional horizon will not be the same,” he analyzed.
Along these lines, he highlighted: “They are starting with a very low average salary – with prospects for improvement – and the rates are not high at all. Furthermore, the value of the square meter is very low”.
What salary percentage does the mortgage loan require?
According to González Rouco, for UVA mortgage borrowers who started paying the equivalent of 25% of their salary for the loan between 2017 and 2018, today that expense represents 30% of their income while “the one who is paying rent takes longer.”
What is the difference between the mortgage loan payment and a rental?
The real estate market analyst Daniel Brynanalyzed the difference between the installment of a UVA mortgage loan taken with the line offered by the city Bank compared to the cost of a rent.
In this scenario, he compared the fee for a studio apartment compared to the cost of rent, which would be 26% more expensive while for a 2 rooms would rise to 36% and in the case of a 3 rooms, at 42%.
Besides, The income to obtain a mortgage loan must also be greater than that necessary to rent an apartment of the same proportions. For a studio apartment doubles the required incomewhile for a two and three rooms are tripled.
As an example, for a 40m2 studio apartment the value of the apartment would be US$80,080based on the average price of US$2,200 per m2 published in March by Zonaprop. In that case, the The cost of the fee would currently be 526 UVAswhich gives a monthly cost of $460,326 versus a rental $365,546 (+26%)also taking the average price of the property platform.
Meanwhile, for a 2 rooms of 50m2 the value of the apartment would be US$110,100with a quota of 658 UVAswhich gives a monthly payment of $575,407 against a cost of rent of $422,505 (+36%). To apply for this loan, the family group must have net income of $2,301,629 while for a rental of these magnitudes it would be $850,000.
And to a 3-room apartment of 70 m2which has a value of US$154,140there would be an initial fee of 875 UVAswhich would raise the monthly cost to $805,570 In front of a rent of $567,747 (+42%). To apply for this line of credit, the family group must have a net income of $3,222,281 while to rent an apartment of these magnitudes you would need to earn $1,135,494.
Apartments properties
Based on the difference between a rent and the payment of a mortgage loan, González Rouco was asked if he would recommend taking out a loan and he was categorical: “Depending on the moment in life the person is in, if they have a stable income and job prospects, and get something they like, I would recommend it.“he assured.
In that sense, he once again insisted that the credit is starting at a relatively low salary, but with the prospect of improvement, as well as the value of the m2 in a historic apartment.
Furthermore, by stating that a credit tied to the CPI in Argentina is complex Due to the inflationary history, the economist was asked about any other variable that could be taken and he indicated that at the time a “compensation fund”where he debtor pays his credit tied to the variation in salaries plus 1.5% and the bank receives it for inflation. This implies that if the salary variation is greater than inflation, the monthly loan update would be higher, but it would be covered by inflation.
“This is what I was proposing Macri in 2019 and which they later resumed Kulfas and Fishbut it was never discussed or voted on in Congress,” the specialist concluded.
Source: Ambito
