Argentina is channeling up to 2 trillion pesos (approx. US $1.3 billion) from its national pension fund to banks, through auctions that began September 7, to finance an estimated 17,000 to 18,000 first-home mortgages for young couples.
The money comes from the Sustainability Guarantee Fund of ANSES, the national social security administration (the reserve fund built from Argentina’s now-defunct private pension system), and is auctioned in rounds of 200 billion pesos (approx. US $132 million) each, with the Central Bank acting as technical operator. Banks bid competitively, with no single institution allowed to take more than 20% of any one auction, then have 90 days to convert what they receive into actual mortgages, against a December 1 deadline.
The loans carry a maximum rate of UVA plus 7.5% annually, tied to Argentina’s inflation-indexed unit of account, with the funds deposited by banks earning UVA plus 2.5% on one-year terms or UVA plus 4.5% on five-year terms. Individual mortgages are capped at 150,000 UVA, roughly $200,000, with a minimum 15-year repayment term, and the loans can only be used to buy a first home.
Officials estimate the program is aimed at households earning around 3.46 million pesos a month (approx. US $2,290) who could afford monthly payments of roughly 865,000 pesos (approx. US $570), an income band meant to capture young, dual-income couples priced out of Argentina’s mortgage market in recent years.