Nicaraguan banks to increase interest rate for housing.

Banks will raise the interest rate for housing loans by one point. Currently the rates are at 9.5% (fixed rate) and 10.5% (variable rate).

Friday, August 8, 2008

The President of the Chamber of Urban Developers of Nicaragua, Alfonso Silva, said that the country's interest rates for housing is the highest in the region, not to mention having the lowest financing offers. Panama ha the best interest rate; by law it provides a subsidy which allows the rate to fluctuate between 0.75% and 4.25% and house that cost from $12,000 up to $60,000. This way both low-income and middle-class housing can benefit.

More on this topic

Costa Rica: Banks restrict housing credit

August 2008

Because of fluctuations in the exchange and interest rates there is more reluctance to provide financing.

After a period of credit surplus and very attractive financial conditions for borrowers, financial entities are now taking a more conservative position with regard to risk, and, in many cases, reducing the amounts that are financed through bank loans.

Credit for housing restricted in Nicaragua

December 2008

The Banking Superintendence issued a ruling ordering that starting January credit that is greater than 40% of the salary of the person requesting the loan should not be granted.

This is applicable to requests for financing for housing or consumption, confirmed the head of the entity, Victor Urcuyo.

Nicaragua: Preferential Interest Rate for Housing loans

May 2014

The recently approved amendment to the Housing Act provides a subsidy of 2.5% in the interest rate for mortgage loans that are not greater than $32,000.

Responding to industry demands and seeking to motivate the new housing market, the recently approved reform also provides, as well as the subsidy, that any bank can apply the exemption of 15% from Value Added Tax (VAT) for mortgage loans with this same ceiling rate.

Nicaragua: Developers propose a Mortgage Fund to the Government

August 2008

The Chamber of Nicaraguan Housing Developers (Cadur) proposed to the Government and to the Association of Private Banks, the creation of an Insured Mortgage Fund.

Said Fund will help to provide legal security to the banks and create an increase in housing projects.
The proposals from Cadur include increasing the payment terms for housing to 40 years, as well as lowering current interest rates and leaving them at 5 or 6%...and to set the purchase premium at 5% of the value of the house. This way the low-income housing should not cost more than $25 thousand.

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