Country Profile

According to a 2002 census, Chile’s homeownership rate was 72.5 percent. At that time, 19.7 percent of homeowners had debt outstanding on their home.

The strength of the Chilean housing market stems in large part from Chile’s highly developed financial markets, which allowed for the considerable expansion of long-term mortgage financing since the mid-1980s. In the first quarter of 2008, the housing mortgage portfolio of the Chilean banking industry was worth some USD $28 billion. Most Chilean mortgages are provided by commercial banks that access capital market funding directly through the issuing of mortgage bonds.

Through its 13 regional agencies (SERVIUs), the Ministry of Housing and Urbanism has mobilized a large and steady supply of fiscal resources in the form of grants and subsidies to mainly low and lower middle income families seeking to purchase their first home. In 2007 the Ministry of Housing and Urbanism disbursed USD $709 million in subsidies, accounting for 58.1 percent of the central government’s housing spending.

Low income households will generally finance the bulk of their home purchase with a state subsidy.Middle income households use a state voucher to cover part of their downpayment. The Ministry has recently abandoned its role as a direct lender to the poor in favor of an expansion of its direct subsidy provision. The Ministry supports the mortgage origination and debt management processes of market lenders through partial credit guarantees and court-cost insurance to reduce the lenders’ foreclosure costs.


UNHabitat. 2009. Housing Finance Mechanisms in Chile.