Mortgage Boom Risks Coming Home to Roost for Brazil’s Banks

Brazil’s mortgage market remains in its infancy, with outstanding home loans totalling R$720 billion (US$135 billion), or around 10% of GDP, which is less than half the ratio in Chile and a fifth of the share in the U.S.

RIO DE JANEIRO, BRAZIL - Owning their first home on the outskirts of São Paulo felt like a distant dream when tattoo artist Fernando do Prado and pharmacist Jenifer Ferreira got engaged in January.

They soon realized, however, that it was within reach if they used their savings as a deposit, with mortgage payments for a similar sized apartment on the edge of Latin America’s biggest city costing less than half the equivalent monthly rent.

“It meant a lot for us to start our lives together already owning our home,” Jenifer said after the couple’s dream came true . . .

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