UVR or Pesos: Which is the best option for buying a home?

Buying an apartment for sale in Medellín is one of the most important financial decisions in anyone's life. To achieve this, there are different mortgage loan alternatives, each with a significant impact on your budget and long-term finances. In addition, financing options vary in terms of monthly payment amounts, credit costs, and debt stability. For this reason, it is important to understand how each alternative works and which one best suits your payment capacity and financial projections. In this blog, we will tell you more about UVR or Pesos: Which is the best option for buying a home?

What is the amortization system?

The amortization system is the method by which a debt is paid in periodic installments that include principal and interest until it is paid off in full. There are two main types of mortgage loans:

– Loans in pesos – Loans in UVR (Real Value Unit) Each has specific characteristics that influence the stability of payments and the total cost of financing.

What does the peso credit option consist of?

If you decide to pay your mortgage in pesos, you will have fixed monthly installments throughout the agreed term, which provides greater financial stability and makes it easier to plan your payments. It is essential to verify that the interest rate is fixed in the contract to avoid unexpected variations in the value of the installments.

Advantages and disadvantages of pesos-denominated loans

– The installment is fixed, allowing you to organize your finances for the duration of the loan, whether you are buying a new home or an apartment for sale in Laureles. – At the beginning, the amount to be paid may be higher compared to a UVR-denominated loan. This type of loan has a fixed interest rate, but the value of the installments varies according to inflation. In other words, the installments may increase or decrease depending on the adjustment of the Consumer Price Index (CPI).

Advantages and disadvantages of UVR credit

– Generally, installments are lower at the beginning and higher at the end, allowing you to have cash flow to meet initial and additional obligations. – When a family applies for a UVR loan, the minimum income requirement may be lower compared to a fixed-rate loan in pesos, as the initial installments tend to be lower and more affordable. – One of the main risks of UVR loans is the variability of the installment, as it can be adjusted monthly according to inflation.