Banks in Brazil are competing for a larger share of the fast growing mortgage lending market in a bid to boost loans as the slowing economy lowers demand for consumer loans.
Caixa Economica Federal, the state-run lender that accounts for more than 70 percent of home loans in Brazil, and Madrid- based Banco Santander SA's local unit said this month they will offer 35-year mortgages for the first time.
Caixa, based in Brasilia, also cut mortgage rates to 8.85 percent, while government-controlled Banco do Brasil SA (BBAS3) cut rates to 7.9 percent for clients who pay on time and open an account.
Brazilian banks are making home loans at lower margins to gain market share after the central bank embarked on the most aggressive interest rate cuts among the largest emerging markets.
Brazil's central bank lowered the country's benchmark Selic rate to a record 8.5 percent from 12 percent in August.
That was the seventh straight cut, and analysts in the central bank's weekly survey of about 100 analysts expect more, after annual inflation slowed to 4.99 percent in May, the weakest pace in 21 months. The central bank has a target inflation rate of 4.5 percent, plus or minus two percentage points.
