Loans in dollars lose their attractiveness to those who earn in colones

QCOSTARICA – Loans in dollars, which experienced a big boom in 2000, have started to slow down since 2016 and today, despite the fact that the rates are still lower than in colones, it is no longer as attractive for those who have no income in colones

María Villalobos, Bank of Costa Rica (BCR) at Expocasa 2014. Dollar lending has declined at state banks. Photo: Mayela López

In 2020, foreign currency loans fell by 3.7% and for 2021 and 2022 the Central Bank estimates that it will not grow, as detailed in its macroeconomic program 2021 and 2022.

– Publicity –

The contraction was concentrated in state banks, where, from May 2017, the dollar loan balance, expressed in colones, began to decline.

Banco Nacional (BN) Institutional Relations, Publicity and Sustainability Branch explained that the reduction is due to the fact that dollar recoveries were not offset by new loans.

At the same time, among private banks, which have dominated this market, dollar lending has remained stable, especially since 2019.

As an example, as there are many other factors to consider when applying for a loan, in the current housing fair, the monthly payment of a mortgage loan of 50 million colones with a term of 30 years at Davivienda, starts at 425,864 colones. , while for a 30-year mortgage of US $ 82,000, it starts at US $ 557 (approximately 340,000 ¢).

– Publicity –

At the Bank of Costa Rica (BCR) a mortgage loan of 50 million ¢ with a term of 30 years, at a rate equal to the base rate (3.45% currently) plus 2.43%, the initial monthly payment is 330,704 ¢, including life, unemployment and fire insurance policies.

For a dollar loan of US $ 82,000, but over 25 years, with an interest rate of 7.50% from the first to the third year, the initial payment is US $ 613 (almost 374,000 ¢) . The quota in colonized dollars is slightly higher, but the duration is five years shorter.

“Previously, the monthly loan payments in dollars were rather favorable compared to in colones. Today the interest rates in colones have undergone a downward adjustment and this tends to be an additional incentive for clients when setting the currency of the loan, ”the BCR said through its press office. .

In 2000, dollar loans accounted for almost one-third of total loans (34%), but their growth was such that in April 2004, they reached almost half of the total (50%). In January 2021, attendance was lower again, reaching 37% of the total.

– Publicity –

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