It is very likely that if you obtained a mortgage loan before January 2016 at Good Finance or Goodbank, you have verified that there is one between your debt and the minimum wage. The credits linked to VSM (Minimum Wage Times) adjusted their value according to the variations of this factor, and that meant a notable increase in the outstanding amounts each time the salary increases.
As of this year, the good news for mortgage loans that are contracted with public funds or in private banking, is that they will no longer be indexed to the minimum wage value, and instead will be referenced to a new factor: the UMA .
What is this new UMA index about?
Before telling you what it is about and how the new mortgage index is quoted in Mexico, we will tell you what its main benefit is: with the de- indexation of the minimum wage , the mortgage loans will no longer see their amounts increased with the increase of the minimum wage above inflation.
The index that replaces the Minimum Wage Times is the UMA : Medica and Update Unit , which is defined in this way by INEGI:
“The Unit of Measurement and Update (UMA) is the economic reference in pesos to determine the amount of payment of the obligations and assumptions provided in federal laws, of the federal entities, as well as in the legal provisions that emanate from all the previous ones . ”
As of February 2016, the UMA was established
which is an economic measure or reference in pesos to determine the payment of fines, taxes, benefits and mortgage loans , and is linked to inflation.
Its great advantage for those who have signed a mortgage loan since February 2016 , is beyond doubt. For example, the increase of the UMA during 2018 was only 4.82%, while the increase in the minimum wage was 16.02%, which increased from 88.36 to 102.68 pesos.
That is to say: the increase in the amount of mortgage loans in 2018 was significantly less than that which would have had to continue linked to the minimum wage.
The inflation index resulting from the previous year
The UMA is updated annually by INEGI , in accordance with the inflation index resulting from the previous year.
It is important to note that those mortgage loans that were signed on Minimum Wage Times within public housing funds cannot move to UMA unless they transfer their mortgages to private banks.