This is a translation of the original article in Portuguese. Read the original (Português).
Caixa Econômica Federal, Brazil’s state-owned federal savings bank, is set to raise interest rates on home financing, according to the newspaper Folha de S.Paulo. The move follows Bradesco, Itaú and Santander adjusting their rates in recent weeks.
The public bank, which accounts for most of the country’s home financing, is calculating where the new rate level should be. There is no official announcement yet of the percentages or of a date for the change.
The third-quarter earnings report helps explain the context. Caixa posted net profit of R$ 3.5 billion in the period, down 7.4% from the same quarter a year earlier. The bank says rising funding costs, meaning the price it pays to obtain the money it later lends, are putting pressure on credit supply.
For people who are buying or planning to buy a home, the effect is direct: higher interest rates make mortgage installments more expensive and reduce the amount that fits within a family’s budget. With the largest private banks already charging more, Caixa had been the main alternative for borrowers seeking lower rates, and an increase there narrows consumer options.
Those who already have signed contracts should not be affected immediately, since the increase would generally apply to new loans. Details on how the change will be applied are still expected from the bank.
The moves by the banks come amid a environment of more expensive money, which makes credit more costly across the board and makes life harder for those who depend on financing to get a home of their own.
Reporting from Folha de S.Paulo (p. 31, caderno nacional: "Após bancos privados, Caixa faz as contas para elevar os juros do crédito imobiliário").
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