They may increase slightly with the increase in 10-year bonds, but they are still going to be very good levels from a historical perspective.”
Carlos Serrano, Chief Economist of BBVA Mexico.
In recent years, even during the crisis caused by the Covid-19 pandemic, bank mortgage loans have been growing in their placement and interest rates have remained historically low, even in one digit.
In fact, not even with the constant increases in the reference rate by the Bank of Mexico (Banxico) to try to contain inflation, had the cost of mortgage loans in the country been impacted.
However, for BBVA Mexico, now that long-term rates, such as the 10-year bond, which is the one mainly related to mortgages, have begun to rise, mortgage loan rates could increase, although at levels which would continue to be considerable.
“The mortgage rate is governed more by long-term rates, especially by the 10-year bond, which performed well until 2021 and remained below 10 percent. Now we are going to see a little more pressure, possibly because, as a result of Russia’s invasion of Ukraine, it has exceeded 9%,” said Carlos Serrano, chief economist at BBVA Mexico.
At a conference in which the Real Estate Situation report was released, he stressed, however, that this would not imply a fundamental change in the cost of financing and in the ability to purchase a home.
“A few years ago we would have dreamed of having single-digit rates. They may rise slightly with the increase in 10-year bonds, but they are still going to be very good from a historical perspective. Even 10% believe that they are good levels, ”she exposed.
He added: “we think that the rates can reach double digits, and we think that they can reach levels of 10.5 percent.”
He stressed that the level of competition that has been reached in the Mexican mortgage market, very possibly means that the increase in rates is not fully transferred.
The mortgage loan granted by banks is the only one that has not stopped growing even during the pandemic.