Brazil’s Bank Santander suddenly raises mortgage rate to 7.99% per year

RIO DE JANEIRO, BRAZIL – Without much fanfare, Bank Santander Brazil (SANB11) increased its interest rate for real estate financing. The news appeared on the website on Tuesday (13) and shows that the interest rate has increased to 7.99% p.a. from 6.99% p.a. plus the Referential Rate (TR), which is currently set at zero.

The rise makes the bank the first to raise property loan rates after the Monetary Policy Committee (Copom) recently announced a string of three consecutive increases in the Selic benchmark rate, which rose from 2% p.a. in March to 4.25% p.a. in the last meeting in June.

The Central Bank left room to accelerate the pace of rate hikes at its next meeting in early August. The Selic rate is expected to be above the current level of 6.25% at the end of 2021, which the market had projected in the last Focus report.

The new rate already appears in the simulation on Santander bank’s website, considering a property worth R$350,000 and financing of about 50% of the value of the property (the maximum allowed in the platform).

REAL ESTATE LOAN

Experts had already warned about the beginning of high interest rates of banks. But they have reinforced that there is still “fat” to burn in terms of spread (banks today capture the money at 4.25% per year and lend it at 7.99%, for example, in the case of Santander).

“We still don’t know how big it is or how long the rate hike, high inflation and this new period will last. But the fact is that the perspectives are changing. Therefore, it is a moment of reflection, a new cycle of high interest rates should lead to an increase in financing costs and an increase in housing prices in the medium term,” said Eduardo Zylberstajn, an economist at Fundação Instituto de Pesquisas Econômicas (Fipe).

Daniele Akamine, a lawyer at the law firm Akamine Advogados e Negócios Imobiliários, explained that the consumer who believes he is at the right moment in life to buy a property should not wait much longer.

“The Selic regulates the interest rate of the market, of course, it is not the only thing that regulates the financing rate, but it is a thermometer,” she said.

According to her, the real estate loan product is very important for the banks, until now we had not seen any repetition of the increase of Selic for the end-user.

The other four major banks are keeping their current interest rates unchanged for now, but we don’t know how long. “Although this product makes the customer loyal and is a long-term product, no one wants to leave money on the table. In this sense, from now on, the chances are higher that the increases will be withdrawn by the banks,” he adds.