Reference Interest Rates for Mortgages for the Month of May

The Central Bank of Paraguay has published the Monthly Summary of Reference Interest Rates for the month of May, offering a detailed overview of the interest rates offered by different financial entities in the country.

In general terms, it is observed that most banks have maintained their minimum interest rates for housing financing with AFD Funds (Development Administration) in local and foreign currency without significant changes compared to the previous month. However, there are some exceptions, such as the slight increase in the minimum and maximum rates in local currency by Banco GNB Paraguay and the alteration of minimum and maximum rates in local currency by Banco Río, compared to the month of April.

An interesting trend is the disparity between the rates offered for housing financing with AFD Funds and own funds. In general, the rates for financing with own funds are higher and more significant changes are observed than those for AFD Funds. In this sense, the specific changes in some financial entities stand out, such as the increase in minimum rates in local currency with Own Funds in Banco GNB, Banco Continental, Banco Basa, Vision Banco, Banco Río and BANCOP. In turn, Banco Itaú, Banco Familiar and Banco Atlas have experienced a significant reduction in minimum rates in local currency with Own Funds compared to the previous month.

These strategic movements can be influenced both by monetary policy decisions and the general economic outlook, as well as by banks' competitive strategies. At the local level, the Monetary Policy Committee (CPM) decided on April 22 to maintain the monetary policy interest rate (MPR) at 6.00% annually. This maintenance is supported by the growth of the Monthly Economic Activity Index (IMAE), which expanded 6.2% year-on-year in February. In addition, the Consumer Confidence Index (CCI) remains in the optimism zone, standing at 53.5 in March, and inflation expectations remain aligned with the goal of 4.0%.

Housing (AFD Funds):

The minimum rates offered by financial entities range between 7.12% and 10.47% in local currency, reflecting healthy competitiveness in the market. Regarding foreign currency, rates range from 5.64% to 10.66%, providing attractive options for those seeking to diversify their financing sources.

On the other hand, maximum rates vary from 12.13% to 18.87% in local currency, showing a wide range of possibilities for potential home buyers. In foreign currency, maximum rates fluctuate between 9.38% and 10.67%, reflecting the stability and predictability of the Paraguayan financial market.

Housing (Own Funds):

In the case of housing loans financed with banks' own funds, the minimum rates present greater variability, with values ranging from 8.25% to 26.51% in local currency. This wide range reflects the different strategies and policies adopted by financial institutions to attract customers.

Regarding foreign currency, minimum rates fluctuate between 5.64% and 10.66%, providing interesting opportunities for those who wish to access the real estate market with financing in foreign currency.

These disparities highlight the importance of comparing available options before committing to a mortgage loan. Consumers should consider several factors, including interest rates, repayment terms, and overall loan terms, to make informed financial decisions that fit their needs and abilities.