The average interest rates of the 90-day CDTs (DTFs) closely track the behavior of Banco de la República’s benchmark rate, indicating a direct and stable relationship between the two over the period analyzed. However, the interest rate on home purchase loans (mortgage rate) has followed a different path: during 2023 and 2024, this rate mirrored the benchmark rate’s downward trend, but as of year-end 2024, even as the benchmark rate continued to fall, the mortgage rate stabilized and began to rise when it was surpassed by the ten-year government yield, following closely behind.
How do the benchmark rate, the 90-day CDT rate, the mortgage rate, and the 10-year government bond rate move relative to each other?
The average interest rates of the 90-day CDTs (DTFs) closely track the behavior of Banco de la República’s benchmark rate, indicating a direct and stable relationship between the two over the period analyzed. However, the interest rate on home purchase loans (mortgage rate) has followed a different path: during 2023 and 2024, this rate mirrored the benchmark rate’s downward trend, but as of year-end 2024, even as the benchmark rate continued to fall, the mortgage rate stabilized and began to rise when it was surpassed by the ten-year government yield, following closely behind.
Related Blog BanRep: The Changing Relationship Between the Benchmark Policy Rate and Mortgage Rates in Recent Times
In recent discussions about Colombia’s macroeconomic environment, the weakening relationship between Banco de la República’s (Banrep) monetary policy rate (MPR, or the benchmark policy rate) and market interest rates has received comparatively little attention...
