RIO DE JANEIRO, BRAZIL - After a long season with banks racing to lower home loan interest rates, the cycle has now reversed. Financial institutions are raising the rates for new financing contracts, in anticipation of more difficult times for the Brazilian economy.
Brazil's largest private banks - Santander, Bradesco, and Itaú Unibanco - have decided to increase the rates charged on home loans by between 0.5 and 1.0 percentage points, to nearly 8% per year.
The average interest rate on mortgages stood at its lowest level in the sector's history, around 7% per year. Until a few years . . .