President of Caixa announces interest rate reduction for real estate financing | Economy


Cash will reduce interest rate on real estate financingMarcelo Camargo/Brazil Agency

Posted 14/09/2021 11:22 | Updated 9/14/2021 5:05 PM

Caixa Econômica Federal will reduce the interest rate for real estate financing, as announced by the president of the bank, Pedro Guimarães, this Monday, 13. According to him, details will be disclosed next Thursday, 16. Currently, the Caixa’s housing loan portfolio totals R$528.9 billion, representing 67.3% of all real estate financing granted in the country.

“Caixa is going to reduce interest rates. Isn’t it increasing the Selic? So, Caixa Econômica Federal, with a profit it never had, without stealing, is going to reduce the interest on its own house. But that’s for Thursday,” stated Guimarães during a ceremony, at Palácio do Planalto, to launch the housing program aimed at public security professionals.

Although the details of the next reduction have not yet been announced, since 2018, the bank has reduced by 2.5 percentage points the interest rate for the credit modality indexed by the Referential Rate (TR). To facilitate understanding of this scenario, economist Alexandre Espírito Santo made a simulation exemplifying how much the discount would be, in practice, for a loan that suffered a reduction like this:

“Let’s use as an example a financing of R$ 500 thousand, with a 20-year term in the SAC modality. If the interest rate is from 6.25% per annum to 3.75% per annum, there is a difference at the end of R$ 120 thousand in interest”, he explained.

Currently, the bank offers four types of housing financing with two different correction factors: TR and IPCA. They update monthly the debit balance on the due date of the installments and the interest varies depending on the client’s profile and its relationship with the bank. Caixa’s financing possibilities are as follows:

Real Estate Credit with TR

In this modality, it is possible to finance the property using the Referential Rate (TR) as a factor for updating the outstanding balance of your contract. It is the most traditional modality in the market, with interest rates that vary between TR + 7.00% pa and TR + 8.00%.

Real Estate Credit with Fixed Interest Rate

The client can also finance his property with a fixed interest rate. It is an alternative for the client who seeks to finance his property knowing how much he will pay from the first to the last installment. Interest rates vary between 8.25% pa and 9.75% pa

Real Estate Credit with IPCA

It is also possible to finance the property using the Extended National Consumer Price Index (IPCA) as a factor for updating the outstanding balance of your contract. Interest rates range from IPCA + 3.55% to IPCA + 4.95% pa

CAIXA Savings Real Estate Credit

In this modality, the customer can finance their residential property with an interest rate that follows the savings income, plus a fixed rate that varies according to their profile. In these cases, the TR corrects the outstanding balance of the contracts, not composing the remuneration of interest charged monthly.

Interest rates are composed of the variation of the Caixa Savings Index + fixed part which varies from 3.35% to 3.99% per annum, with a ceiling if the income on savings rises. The variation in savings is calculated as follows: 70% of the Selic, when the rate is equal to or less than 8.5% pa or 6.17% per annum, when the Selic rate is greater than 8.5% pa The ceiling , in the event of an increase in the Selic Rate, whose index guides the savings income, is 10.16%.

Selic influence

In short, when the Central Bank increases the basic interest rate, the purpose is to contain the heated demand and this causes reflexes on prices, because higher interest rates make credit more expensive and stimulate savings. When the Selic rate is reduced, as happened last year, the trend is for credit to become cheaper, with incentives for production and consumption, reducing inflation control and stimulating economic activity.

The current rate is 5.25% per year and the announcement of the reduction in Caixa’s interest rates goes in the opposite direction to financial market projections, as economists expect a Selic rate of up to 8% by the end of this year.

Interested parties can access the Caixa’s website and make a simulation of real estate financing through the link: http://www8.caixa.gov.br/siopiinternet-web/simulaOperacaoInternet.do?method=inicializarCasoUso