UVR vs. Pesos: The Inflation Gamble in Colombia

In Colombia, there are two ways to get into debt for housing: in Pesos (fixed rate) or in UVR (Real Value Unit).

Banks often offer UVR because the initial installment is lower, which allows you to "qualify" for a higher amount. It's a trap.

The Problem: The Debt That Grows on Its Own

UVR is tied to inflation. If inflation rises 10% in a year, your debt balance (in pesos) rises approximately that same percentage, before your payments are applied.

We have seen dramatic cases: people who borrowed 200 million pesos, paid dutifully for 5 years, and today owe 220 million.

The Agitation: Running on a Treadmill

Being in UVR is like running on a treadmill that keeps going faster. If inflation skyrockets, your installment goes up and your principal doesn't go down. It is financially exhausting and psychologically devastating.

If you have a UVR loan today, you are exposed to the country's macroeconomic volatility. You are not in control.

The Solution: Amortize or Portfolio Purchase

You have two emergency exits:

1. Portfolio Purchase (Refinancing): Move your debt to Pesos (Fixed Rate). Even if the installment is higher, you will know that it will never go up and that every peso you pay will lower the real capital.
2. Aggressive Amortization: If you cannot switch to Pesos, you must make extraordinary payments to capital urgently.

In UVR, amortizing capital is the only way to stop inflationary indexation. Every million you pay today stops growing with inflation tomorrow.

📱 The Simulation on Amorti

Visualize the impact of exiting UVR.

1. Take your current statement (Balance in Pesos).
2. In AmortiApp, simulate that balance as a new loan with a fixed rate in Pesos (e.g., 13% E.A.).
3. Compare that stable projection with the uncertainty of your current loan.

If you have extra money, use it to kill the UVR. It is the best defensive investment you can make in Colombia.

Don't let inflation eat your wealth.

Simulate Capital Payment