Banks seek delay to Brazil’s new mortgage rules

As Valor reported this week, financial institutions are also pushing for a review of the model’s 12% interest-rate cap. The requests are expected to be formally submitted to the Central Bank soon, and the regulator has asked for two months to assess them, one person following the talks said. The Central Bank declined to comment.

Banks argue that when the rules were designed in 2025, forecasts pointed to rapid cuts in the Selic benchmark rate, which did not materialize. With the policy rate now at 14%, they say it would be difficult to offer mortgages at 12%, particularly as lenders are expected to rely less on savings deposits and more on capital-market funding.

One of the biggest changes under the new framework concerns the use of savings deposits.

Under the previous rules, 65% of funds raised through Brazil’s Savings and Loan System, or SBPE, had to be directed to mortgage lending, while 20% was held at the Central Bank as reserve requirements and the remaining 15% could be freely allocated by banks.

• High interest rates could hinder new housing finance model
• Brazil’s mortgage lending beats forecasts with 23% 1st-half growth

Under the new model, the share of savings deposits tied to housing finance will gradually increase. Reserve requirements were cut to 15% from 20% this year as the testing phase began. Under the original timetable, they are set to fall by another 1.5 percentage point a year starting in 2027.

Once the framework is fully implemented, a bank that raises R$1 million in the market and directs the full amount to mortgage lending will be allowed to use an equivalent R$1 million raised through lower-cost savings deposits for unrestricted investments for a predetermined period.

To qualify, however, 80% of the volume must be allocated to housing loans made under the Housing Finance System (SFH), where the effective annual cost is capped at 12%.

Gilneu Vivan, the Central Bank’s regulation director, said this week that the requirement to allocate 80% of funds to loans that meet SFH conditions has been one of the most debated aspects of implementation. He also signaled that changes remain possible.

“As with any regulatory action, the new model is under constant reassessment, not only regarding the effects observed during the testing period, but throughout its implementation, with the Central Bank attentive to any adjustments that may be needed to ensure market stability and efficiency and serve the public interest,” Vivan said at an event hosted by the Brazilian Association of Real Estate Credit and Savings Institutions (Abecip).

Despite the challenges — which also include discussions over contract indexation and the dynamics of prepayments and loan portability — early results have been “encouraging,” Vivan said.

“There is no doubt that the decline in new lending that had been taking place since early 2025 has reversed. In the first months of the testing period, we already saw an increase in lending, both for properties worth up to R$1 million and those in the R$1 million to R$2.25 million range,” he said.

Mortgage lending outperformed expectations in the first half, rising 23% from the same period of 2025 to R$180.9 billion, Abecip said.

The association is now expected to revise its growth forecast for the year. Its January projection called for a 16% increase, with total lending of about R$375 billion.

Asked about the banks’ proposal, Abecip declined to comment directly but said in a statement that it “maintains a permanent and constructive dialogue with the regulator, providing technical input for the analysis of different scenarios.”

“There is not necessarily a single solution for each situation: there are different technical alternatives, with different impacts and implications. Our role has been to support this debate by providing information that contributes to a broad and well-founded assessment of the possible solutions,” the association said.