Mortgage rates to increase

Several local banks have announced that they will increase the interest rate on mortgages. . The increases announced by some of the banks are between 0.25% and 0.50%.

When talking about an increase in the interest rate of 0.50% might not sound like a lot, but the increase is substantial considering the amount of indebtedness and the level of average Panamanian income. The local rate for  mortgages is between 5.25% and 5.50%.

Figures from the Superintendency of Banks of Panama  reveal that the balance of the residential mortgage credit had a growth of 10% between 2016 and 2017, going from $ 12 thousand 794 million to $ 14 thousand 83 million.

Although the indicator continues to grow, it does not occur at the same rate as it did between 2011 and 2012, when it reached 15%, going from $ 6,702 million in 2011 to $ 7,706 in 2012.

The president of the Panamanian Institute of Consumer Rights and Users, Giovani Fletcher, said that by increasing the rate of interest there is a decrease in customers.

Bankers consulted explained that in the configuration of local rates affect, in part, the increase applied by the Federal Reserve of the United States (FED).

"Given the increase in the interest rate worldwide, it is reasonable to expect an adjustment in the national banking system, as Panama is an integral part of the international banking system," said Carlos Berguido , executive vice president of the Panama Banking Association. However, not all banks are raising rates.

"There is no generalized policy of adjusting conditions to loans of any kind. The loan policy, including mortgage loans, is an individual decision, and is not coordinated or communicated between banks, "said Berguido.