From January to August 2021, the average mortgage rate closed at 9.36%, and averaged 9.68% in the first week of September. This increase in mortgage lending reflects the strong performance of the construction sector, which has been the most dynamic activity in the economy.
Taken from Listin Diario
The Dominican Republic's financial system continues to reflect low active interest rates, which are those applied to loans, a behavior that is also maintained in passive rates, which are the returns paid for deposits and placements of financial certificates and other instruments in the banking sector and savings and loan associations.
The downward trend continues in commercial, personal, and consumer loans, as well as preferential loans and mortgage financing. The latter saw a very slight increase on September 7th of this year compared to 2020, although it remains well below the 2019 level, when the rate stood at 11.12%.
The decline in mortgage and/or development loans was reflected in 2019 and 2020, with average rates of 9.01% and 9.36%, respectively. Although this contrasts with the 10.31% average on the 7th of this month, official data reveals that negotiations were closed this month at 9.22%, the lowest rate since 2020.
From January to August 2021, the average mortgage rate closed at 9.36% , and averaged 9.68% in the first week of September. This increase in mortgage lending reflects the strong performance of the construction sector, which has been the most dynamic activity in the economy.
In addition, financial institutions are offering low interest rates depending on the term of the new loan and also have fixed rates available for six months, one year, and three or more years. Some institutions have offered to waive closing costs, especially for affordable housing, and fixed rates for the life of the loan.
Banks are now registering interest rates at historic lows since 2000, even lower than savings and loan associations. In August of this year, the weighted average interest rate closed at 8.46%, and to date it stands at 9.68%, according to commercial banks, using data from the Central Bank.
Another reason for the slight increase in new loans arranged in September may be that, with the resources allocated for these purposes exhausted from liquidity facilities, these are being channeled with own resources.
However, banks like Banco de Reservas have launched offers ranging from 5.8% for six months, 7.50%, 7.80%, 9.80%, and 11.80%, with terms of one, three, five, and ten years. Other banks will be releasing new offers.
According to statistics from the Central Bank, loans granted this year by financial institutions up to the first week of September remained at an average of 8.67% for the commercial sector, a behavior of six points less compared to the rate of 15.45% that it had reached throughout the year 2020 and 11.43% in 2019.
In the retail sector,
on the 7th of this month, the interest rate for commercial loans closed at 8.95%. Meanwhile, interest rates for consumer and/or personal loans have also decreased. From 18.11% in 2019, they fell to 10.89% in 2020, and by the end of August 2021, they stood at 15.30%.
In the first seven days of this month, the average closed at 16.03%, although on the 7th, trading closed at 15.69%. In the retail sector, the decline is highly significant, given that in 2019 it was 11.43%, in 2020 it was 15.45%, and up to August 2021 it was at 8.67%, closing in the first seven days of September at 7.78%.
The weighted average rate for preferred customers has also decreased from 10.34% in 2019, to 9.0% in 2020 and 7.18% as of August 2021. In the first week of September it closed at 6.82%.
Loans:
The active interest rates registered with the Central Bank include the rates that the financial system grants to its preferred clients.
September 2021
The Superintendency of Banks reports, based on data from the Central Bank, that since 2020 mortgage financings have been negotiated at a rate of 9.22%, which is "the lowest record".
September 7th.
Loans to the commercial sector closed on the 7th of this month with rates of 8.95%, mortgages at 10.31%, consumer loans at 15.69%, and preferential loans at 7.19%.
Passives. The active rate for savings closed at an average of 0.1968% this month.
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