Clipping of news on Brazilian Culture, Law and Citizenship
20/06/2014
This article was translated by an automatic translation system, and was therefore not reviewed by people.
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According to the Central Bank, interest charged by major banks in housing finance ranged from 6.22% to 17.68% per annum in May
Sao Paulo - Find banks with best interest rates on home mortgage can get to generate savings of more than 90 thousand dollars. Therefore, more than in any other loan transaction when acquiring property loans is essential to compare the costs.
In May, according to the Central Bank, the fees charged by big banks ranged from 6.22% (Bank of Brazil) per year to 17.68% per annum (box).
As the property acts as a guarantee to the bank, the mortgage loan is one of the more lines with lower interest rates in Brazil.
There are different types of mortgages. Those performed by the Housing Finance System (SFH) usually have lower fees, since they are regulated by the government and use resources savings and FGTS.
This modality includes only properties up to 750 thousand dollars in the states of São Paulo, Rio de Janeiro, Minas Gerais and Distrito Federal or up to 650 thousand dollars in other states.
Above these value ranges, funding can only be made out of SFH, and interest rates may be higher.
In addition, interest may be charged in two ways: pre-fixed interest lines have agreed upon contract and remain the same until the end of the funding; and floating lines have a fixed interest rate and corrected by the Referential Rate (TR), which will be greater the higher the benchmark interest rate, the Selic.
The conditions also vary according to the client's relationship with the bank. That's why, even though the box wont be the bank with the lowest interest rates, depending on where the customer can get cheaper rates at other banks.
See the tables below the average interest rate charged by major banks in housing finance in each type of contract in the month of May, according to information given by the financial institutions to the Central Bank:
Inside the SFH, with pre-fixed rate interest rate:
Institution month interest rate (%) Interest rate per year (%) Citibank 0,65 8,04
Santander 0,84 10,62
Banco do Brasil 0,98 12,38
Source: Central Bank
Period: May 2014
A complete table of all the banks is available in EXAME.com.
Inside the SFH, with interest rate corrected by TR (postfix):
Institution month interest rate (%) Interest rate per year (%) Banco do Brasil 0,50 6,22
Caixa Econômica Federal 0,61 7,59
HSBC 0,68 8,49
Santander 0,69 8,60
Bradesco 0,69 8,64
Itaú Unibanco 0,78 9,74
Source: Central Bank
Period: May 2014
A complete table of all the banks is available in EXAME.com.
Out of SFH, with pre-fixed rate of interest:
Institution month interest rate (%) Interest rate per year (%)
Citibank 0.66 8.23
Source: Central Bank
A complete table of all the banks is available in EXAME.com.
Out of SFH, with interest rate corrected by TR (postfix):
Institution month interest rate (%) Interest rate per year (%) Santander 0,7 8,72
Bradesco 0,71 8,85
Itaú Unibanco 0,76 9,47
Caixa 1,37 17,68
Source: Central Bank
Period: May 2014
A complete table of all the banks is available in EXAME.com.
Interest is not everything
The comparison of interest can function as a first analysis of which banks are more expensive or cheaper financing costs.
But many other costs are involved in a real estate financing and the interest can be negotiated according to the relaciomento that the customer has with the bank and your credit profile.
The best way to compare costs is to observe the Total Effective Cost (TEC), a rate that includes all expenses with funding beyond the amount paid for the property.
The TEC includes the interest, mortgage insurance (MIP and DFI), the monthly charge of administrative services and the rate of property assessment and taxes, where applicable, as the Tax on Financial Operations (IOF).
As the cost of home insurance, for example, can easily surpass the amount of 100 thousand dollars at the end of the period, and varies over 135 thousand dollars between different financial institutions.
Source: Ex
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This article was translated by an automatic translation system, and was therefore not reviewed by people.