Chile Senate approves expansion of mortgage subsidies and FOGAES guarantee

The Chilean Senate has unanimously approved a bill to extend and expand mortgage interest rate subsidies and the FOGAES state guarantee for first-time homebuyers. The legislation, which passed the Senate with 33 votes, aims to facilitate access to housing financing and stimulate the construction sector.

Key provisions of the measure include increasing the property value cap for eligibility from 4,000 UF to 6,000 UF and raising the number of available slots from 50,000 to 80,000. The program's validity has been extended until May 2028. The subsidy is expected to reduce mortgage rates by approximately one percentage point, bringing them down from 4% to 3%.

Finance Minister Jorge Quiroz noted that the expansion targets the middle class, with the new limit covering approximately 88.1% of new housing stock available by early 2026. The measure is intended to complement a temporary VAT exemption on new homes, which could reduce prices by roughly 10%. Additionally, the FOGAES guarantee allows buyers to secure homes with a down payment of approximately 10% of the property value.