Chile proposes capital markets reform to improve housing access

Chile is advancing a capital markets reform aimed at improving access to housing through the creation of the National Housing Fund (Fonavi). Managed by BancoEstado, Fonavi is designed to support the purchase of mortgage credit portfolios to mitigate the rising costs of financing and increased down payment requirements that have impacted middle and lower-income families.

As part of this legislative initiative, there is an ongoing debate regarding the deindexation of mortgages from the Unidades de Fomento (UF) to allow for long-term loans in pesos. Mario Farren, president of BancoEstado, has expressed support for the possibility of mortgage credits in pesos, though he noted it remains a long-term aspiration. While some economists suggest that moving away from the UF does not necessarily pose a systemic risk, others emphasize that further studies are required before such a transition can occur.