As we all know, mortgage credit is a tool that favors the acquisition of housing. For some people, the only possibility of acquiring a property is through the Mexican Institute of the National Housing Fund for Workers “INFONAVIT”, the main provider of housing loans in the country, which for decades has offered more loans than banks, but does not currently have the best financial conditions. The year 2022 was positive in terms of mortgage loans, which reflected a positive balance with an average rate of 9.55%.
In spite of the monetary policy that has been under pressure during the past year, banks contained the increase in rates, following the Bank of Mexico “BANXICO’s” policies to curb inflation, providing a constant flow of acquisitions.
Mortgage rates are more linked to the M10 (10-year bond rate) and not to the reference rate defined by BANXICO, which is why the mortgage market may decrease, since there is no change in the behavior of the M10.
Mortgage credit in 2023 has remained in double digits, but without rising too much. If conditions throughout this year improve and are maintained, rates could be lower. This would apply if the benchmark rate and inflation are maintained and if the global economy begins to cool. Financial institutions granting mortgage loans foresee that they could continue to have the same conditions, however, they would seek income from other sources such as commissions in order to support increases in favor of the consumer.
As for the placement of housing loans by commercial banks, there was a 15% annual decrease at the end of the first half of 2023, with a total of 61,400 mortgages, according to data from the Mexican Banking Association (ABM). In terms of investment, there was a 3% decrease with MXN$131.2 billion placed.
Now is a good time to buy a home through a mortgage loan. Although rates could increase, they are stable, so they are an excellent opportunity to obtain a property with good conditions by seeking advice from a mortgage specialist. The Mexican National Commission for the Protection and Defense of Users of Financial Services “CONDUSEF” also shows every year a comparative table of the mortgage interest rates offered by different banking institutions operating in Mexico. Some of these banking institutions have a mortgage loan simulator available to the public.
Enrique Margain, coordinator of the Mortgage Committee of the Association of Banks of Mexico (ABM), stated that since last year there has been a slowdown in the acquisition of housing units with mortgages, with a drop in the volume of loans that has resulted from increases in the average amount handled by banks, leading to an increase in housing loans, which has prompted banks to reevaluate their strategies, to focus on the innovation of their products and services in order to maintain their competitiveness.
BBVA Mexico announced this year a historic investment of MXN$100 billion for the housing sector. In the course of this year, BBVA Mexico expects to place more than 45,000 mortgages in individual loans for more than MXN$77 billion, and will grant more than MXN$33 billion in loans to developers for housing construction.
Banco Santander Mexico has a 17% market share in the bank’s mortgage portfolio, with a portfolio of MXN$212,372 billion at the end of the first half of this year, which in turn represents 26% of the bank’s total portfolio.
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**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document only refers to laws applicable in Mexico.