12% per year. That is the ceiling on interest rates for home loans framed under the SFH, Brazil's regulated housing finance system, and Caixa Econômica Federal, the state-owned bank that is the country's biggest mortgage lender, admitted on Thursday (27) that operating under that limit has become hard. For Brazilians hoping to leave the rent cycle, the message is blunt: mortgage credit is likely to stay expensive and scarce while the Selic, the central bank's benchmark rate, sits at 14% per year.
"We are in a very difficult moment; the 12% cap is challenging," said Inês Magalhães, Caixa's vice-president for Housing, as she discussed the bank's second-quarter results, according to Folha de S.Paulo.
"Now, we must remember that the SBPE [Brazilian Savings and Loan System] has its origin in savings deposits, and it is a subsidy. In a country with an income pyramid like Brazil's, it is very reasonable to have a guideline so that this resource serves a certain profile of property and population."
The problem, the executive explained, is not the cap itself but the math it imposes with the Selic at 14%. In practice, the bank pays close to 14% a year to raise money and earns at most 12% when it lends. It is like buying each basket of groceries for R$ 14 and being forced to resell it for R$ 12: the books simply do not balance.
That mismatch, Folha reports, is feeding pressure from financial institutions on the Central Bank to revise the limit. Under the current rule, rates on SFH-framed credit cannot exceed 12% until January.
What the SFH is
The SFH is the system that organizes mortgage lending in Brazil. Historically, the money for home loans comes from the poupança, the traditional passbook savings account gathered through the SBPE, which is why its interest rate works as a subsidy, cheaper than market rates. The cap exists to make sure that cheaper money reaches properties and families within a defined income profile.
The knot began when the high Selic drained the poupança. With the benchmark rate in double digits, savers moved to CDBs (bank deposit certificates) and Tesouro Direto (government bonds sold to individuals), investments that pay more, and the cheap money behind mortgages shrank.
To rebuild the flow, the government authorized banks to raise funds in capital markets through instruments such as LCIs (real estate credit notes, securities investors buy to fund the sector). That money, however, costs well more than savings deposits and swings with investor sentiment, Folha reports.
The new housing finance model, announced in late 2025 and being phased in, takes full effect in January 2027. Its goal is to cut the system's historic dependence on savings deposits, which hold less and less money.
The pressure on the cap comes at a record moment for the bank: Caixa's mortgage portfolio topped R$ 1 trillion for the first time, up 15% in 12 months, according to O Globo and UOL. In the second quarter, the state bank posted a profit of R$ 3.9 billion, up 5.9%, according to G1.