Mortgage rate reflects market adjustments

Despite the rise in interest rates promoted by the monetary authorities in the local market, taking into account the resources available to control inflation, the market itself has been in charge of adjusting the price of money and today mortgage loans are closed at 11.09%. , a little cheaper than in the quarter of this year.

In the January-March quarter of this year 2023, the mortgage interest rate closed on average at 12.76% and remained with fluctuations of 10.41% and 13.20% until completing business at 11.09 on the 18th of this month, according to official figures from the Central bank.

It is inferred that this relationship responds to the fall that is reflected in the private construction sector that fell -11.5% and in commerce that also fell -0.7% and therefore in a loss of dynamism in the mortgage market.

However, buyers affirm that from now on this table will also adjust the prices of homes that already had extraordinary values, almost overvalued and with prices in dollars.

In January of this year, buyers of houses and buildings with mortgage loans in the Dominican financial system closed deals with a rate of 13.06%, in February of 13.15% and in March of 12.23%.

Already in the first 18 days of April the weighted average rate closed at 12.43%, although on the 18th day of the last data record it closed at 11.09%.

However, that sector that in 2021 closed deals at an active rate (loans) of 9.15% and registered deals of 6.21% for the preferential rate began its upward trend from 2022 until closing at 11.45%, a behavior that varied until reaching December at 12.23%, the same as last quarter.

While consumer activities and personal loans closed deals at an average of 19.84% in the first quarter of this year, they register an increase of two points, from the 17.84% average that had closed in 2022.

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In April, the active interest rate in consumption and personal loans rose another point, closing at 20.46% on average and at 20.58% on April 18.

If the behavior since 2021 is taken into account, the increase is four percentage points, rising from 15.45% to 20.46% in the last three years. However, the closing of the quarter was 19.84% and the trend of 20% will continue, since there were businesses at the rate of 21.14%.

Commercial activities also register an increase of four points from 2022 to date, but the percentage registers an almost imperceptible drop in the quarter and on April 18. The average of the passive rates for commercial loans was 13.90% in the first quarter of this year and 14.72 in the first 18 days of April. On the 18th, deals were closed at a rate of 14.32%.

preferential

In the market, since 2019 the data on the behavior of preferential interest rates has been stratified by sector, that is, the interest charged to preferential debtors, those who have a positive behavior of compliance and payment capacity .

The weighted average of the prime rates was 12.13 in the 2023 quarter and 12.77% last April and there were negotiations with rates of up to 10.80%.

The preferential rates for commerce closed at 12.83%, in consumer and personal loans of 13.63% and in the mortgage of 11.20% in the first 18 days of April.

On the 18th, deals were closed at 10.92%, 10.56% and 988%, respectively.

Interest rates respond to the price of money. The assets apply for financing and the liabilities are those that are paid for investments, savings and current accounts.

The Monetary Policy Rate (TPM) in the Dominican Republic has remained at 8.50% since October 2022, when it was at 8.25%.

The monetary policy measure has focused on controlling inflation.

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