Mortgage rates remain high despite cuts by the Central Bank

Global Property Guide (GPG) analyzes the behavior of housing credit prices in the country.

SANTO DOMINGO. -According to data updated to August 12, 2025 by the Global Property Guide (GPG) , the dream of owning a home in the Dominican Republic continues to be expensive because, despite the fact that the Central Bank has maintained the reference rate at 5.75% annually, since January 2025, mortgage loans in national currency exceed 12% .

In May of this year, the average interest rate for mortgage loans in pesos was 12.14%, practically the same as the 12.15% of 2024 and slightly higher than the 12.09% recorded in 2023, while in foreign currency, the average stood at 8.97%, compared to 8.52% a year earlier and 8.03% two years ago.

The publication analyzes that although monetary policy is stable and under control and monetary conditions would seem more favorable, the reality is that access to housing credit is not cheaper.

The Central Bank has insisted that it is maintaining the benchmark interest rate at 5.75% because inflation is under control, within the target range of 4% ± 1%, and the economy is showing stability in the face of global uncertainty due to geopolitical crises.

The publication cites that since mid-2024 several cuts have been made: the rate went from 7.75% in July 2023 to 6.00% in December 2024, reaching the current level of 5.75% in January of this year, and has remained at that level for seven consecutive months.

According to tradingeconomics.com and the Central Bank itself, the current reference rate (5.75%) has been maintained since January 2025, following a series of cuts initiated in mid-2024, seeking to curb inflationary pressures and promote economic stability.

Historically, the contrast is even more striking: the average monetary policy rate between 2004 and 2025 has been 6.84%, well below the levels of mortgage loans paid by homebuyers.

The contrast

While the Central Bank speaks of stability, market data shows that housing credit remains high . According to TheGlobalEconomy, based on official Central Bank figures, monthly mortgage rates ranged between 11.14% and 12.14% between January and June 2025, while a report from the real estate portal SuperCasas, from August 2025, indicates that banks offer fixed initial rates between 9.5% and 10.25%, but only for a short period of years at the beginning of the mortgage.

Between July 2023 and June 2024, the weighted average mortgage rate rose from 10.67% to 13.14%, an increase of more than 23% in one year, according to the Terrenitord website. Although no longer at their peak, rates remain far from what many Dominicans would expect after the Central Bank's rate cuts.

Is this a structural or cyclical problem?

For buyers, especially families, the reality is simple: even though authorities assure that inflation is under control, home loans are not becoming cheaper due to the high cost of money offered by banks.

Local experts point to a scenario where the high cost of materials, reliance credit to purchase housing, and the limited flexibility of the financial system act as structural barriers, and that the gap is due to several factors: the cost of bank funding, the perception of risk, and the dynamics of the local real estate market itself. However, what is concerning is the persistence of this disparity.

It's not just the rates

Several representatives from the construction and financial sectors have pointed out key elements that explain why mortgage rates remain high, even when monetary policy has become more flexible: Annerys Meléndez, president of the Dominican Association of Housing Builders and Promoters (Acoprovi), noted at the entity's luncheon last July that "mortgage rates have been above 14% and material costs have increased by more than 18% in two years, directly affecting the possibility of building and selling."

Eliseo Cristopher, president of the Dominican Confederation of Construction SMEs, pointed out that the constant increase in mortgage rates has led many families, especially those with middle and low incomes, to postpone their purchase decisions, as their income is no longer enough to cover the high installments.

Bernardo Fuentes, an economist at Banco BHD , shared at the same event that more than 70% of home purchases depend on financing and the increased cost of loans "has limited the purchasing power of thousands of families."

In other countries, such as Panama, cuts in the benchmark interest rate quickly translate into cheaper loans. In the Dominican Republic, however, mortgage rates seem to move much more slowly.

The construction sector, which relies heavily on mortgage financing, could be negatively impacted by this situation. With double-digit interest rates, many families are postponing home purchases or seeking longer loan terms, which increases the overall cost of credit, resulting in a complex cycle: the economy appears stable, but access to housing remains a challenge.

The question that remains open is whether this gap is temporary or whether it has become a structural feature of the Dominican financial system, with direct consequences for the middle class and the future of the real estate market.

Global Property Guide (GPG) is an international portal that analyzes the real estate market in more than 100 countries. Its goal is to offer reliable and comparable information on: mortgage interest rates in local and foreign currency; rental yields; taxes and transaction costs for home purchases; and conditions for domestic and foreign buyers.
In the case of the Dominican Republic, GPG draws on data from the Central Bank and local financial intermediaries, presenting it in a standardized format for investors, analysts, and the general public. Therefore, its information is a frequent reference point when discussing the cost of acquiring housing in the country.