October 27, 2016 / 7:22 PM / 2 years ago

Brazil's Caixa plans to cut rates to spur mortgage demand -source

SAO PAULO, Oct 27 (Reuters) - Caixa Econômica Federal SA plans to cut interest rates on mortgage loans and raise the maximum amount that homebuyers could borrow as Brazil’s largest mortgage lender seeks to rekindle demand for credit, a person with direct knowledge of the plan said on Thursday.

According to the person, who requested anonymity because details of the plan remain private, the program entails a reduction in rates for mortgages financed with savings accounts through the so-called SBPE system. The move comes after the central bank last week cut its benchmark Selic lending rate by a quarter of a percentage point to 14 percent, marking its first reduction in four years.

Reporting by Aluísio Alves; Writing by Guillermo Parra-Bernal; Editing by Andrew Hay

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