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Argentina's central bank creates inflation-indexed unit for mortgages

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Argentina's central bank creates inflation-indexed unit for mortgages

Argentina'scentral bank, Banco Central de laRepública Argentina has created a new inflation-indexed unit for mortgageloans, known as the Unidades de Vivienda,or UVI, which is designed to make housing more accessible for Argentine families,the bank said in a statement April 7.

Six bankshave already agreed to offer these types of loans, which will have initial paymentsthat are significantly lower than conventional mortgages, La Nación reported April 8.

The valueof the UVI, which is initially 14,053 Argentine pesos, is linked to the averageconstruction cost per square meter for buildings of different types in the citiesof Buenos Aires, Co´rdoba, Rosario and Salta, among others, the central bank said.

The UVIwill be updated daily based on inflation and its value will be posted on the centralbank's website.

Accordingto the central bank, a loan of 700,000 pesos currently requires a down payment of14,408 pesos, but using the new unit, it would require a down payment of 5,639 pesos, La Nación reported.

In additionto mortgage loans, Argentines will be able to invest in UVIs through term depositsof a minimum 180 days in order to protect their savings from inflation, the centralbank noted.

As of April 7, US$1 was worth14.50 Argentine pesos.