Banks make more mortgages available for property in Brazil

A growing war between Brazil’s
biggest mortgage lenders is increasing the amount of finance available to
people looking to buy property in the country.  Lower rates and improved repayment terms are being offered
by banks, which is great news for anyone looking to borrow to buy a home in
Brazil. 

Keep reading to learn more.

Brazil interest rates cut as mortgage war deepens

Bloomberg reports that Caixa
Economica Federal, the state-run lender that accounts for more than 70 per cent
of home loans in Brazil, and Santander’s Brazil based operation are shortly to
offer 35-year mortgages for the first time.

Caixa, based in Brasilia, also
recently cut mortgage rates to 8.85 per cent, while government-controlled Banco
do Brasil cut rates to 7.9 per cent for clients who pay on time and open an
account.

Some of the competition is
between state-owned banks.  Banco
do Brasil, which currently ranks fifth with 3.6 per cent of mortgages, is
looking to become the second biggest lender in the market by the end of
2014.  Caixa is currently the
largest lender, with a share of about 9 per cent.

Brazil’s mortgage lenders
association, Abecip, expects the home loan market to grow by 30 per cent in
2012, with even mortgages for the first time buyer potentially easy  to obtain. Victor Moscoso, a director
at Brazilian Capital, said: “Brazilians don’t like to borrow money but now that
credit is available, they may say, ‘I should take advantage of that.  That could change the mentality.”

Brazil’s central bank has cut the
country’s benchmark Selic rate seven times in recent months, from 12 per cent
last August to 8.5 per cent now. 
Analysts also expect further cuts after recent inflation figures hit a
21 month low.

“The market is undergoing an
evolution,” said Joel Wells, a Brazilian property expert. “It just tells you
the mortgage market is deepening.”

Author : Nick
Marr