El Salvador: Preferential Rates for Mortgage Credits

A bill on preferential interest rates suggested by the industry would reduce the cost of a home loan by up to 50% and boost construction in the country.

Tuesday, June 17, 2014

In order for the construction sector to recover from a 2013 that ended with a negative number it is necessary to reduce interest rates on mortgage loans so that more people are able to buy a home, therefore the business sector is recommending a proposal for a law on preferential interest, which was proposed more than six years ago.

Carlos Guerrero, president of the Salvadoran Chamber of Construction, "... explained that with this law, Salvadorans applying for the purchase of a $15,000 home with a repayment term of 25 years, currently pay an average interest rate of 7.6%, paying $111.83 in monthly fees, but this preferential interest law could see them paying $68.05, generating savings of $43.78 per month."

"... This law ... the construction sector will be more dynamic ... companies would invest in building and marketing, and this would generate more jobs."



More on this topic

Panama: Incentive to the Housing Market

September 2019

The Cortizo administration approved a proposal that establishes that the government will assume 2% of the bank interest for the purchase of homes valued between $120,000 and $150,000, and in the case of real estate between $150,000 and $180,000, the exoneration will be 1.5%.

The Cabinet Council approved on September 3 the bill No.

Proposal to Dynamize the Construction Sector

December 2018

The builders' guild in El Salvador is preparing a law proposal, which provides for the approval of preferential interest rates on loans for home purchases.

The proposal to be presented by the Salvadoran Chamber of Construction Industry (CASALCO) will be applicable for bank loans to low- and middle-income families who purchase their first home.

More Credit Requested in El Salvador

March 2012

Employers have suggested that the Social Housing Department raise the ceiling for lending to $125,000, in order to create opportunities for lower-income segments.

The Salvadoran Chamber of the Construction Industry (Casalco) has proposed that the Social Housing Fund (FSV) increases to $125,000 its lending ceiling, seeing as it is now being analyzed, reported Elmundo.com.sv.

Incentives for Housing Construction Proposed

June 2009

Legislation in El Salvador proposes preferential interest rates for the purchase of new housing with costs between $15,000 and $60,000.

The Salvadorian Chamber for the Construction Industry (Casalco) presented to the Legislative Assembly a government bill that would encourage low-income families to purchase new housing in the range of $15,000 to $60,000.

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