How financing works
With financing, the bank pays for the property or asset and you pay back the amount financed in monthly installments, with interest. Each payment has two parts: interest (calculated on the outstanding balance) and amortization (how much of the debt is actually paid down).
SAC table
In the Constant Amortization System (SAC, from the Portuguese Sistema de Amortização Constante), the amortization is the same every month (amount financed ÷ number of payments). As the balance falls, the interest shrinks and the payment keeps decreasing over time. The first payment is the highest; in general the total interest paid is lower.
Price table
In the Price table (a fixed-payment system), the payments are fixed: PMT = P × i ÷ (1 − (1 + i)−n). At the start, most of each payment is interest and the amortization is small, and it grows over time. It fits the budget better at the beginning, but costs more interest in total.
SAC or Price: which one to choose?
- SAC: better if you can afford larger payments at the start and want to pay less interest in total.
- Price: better if you need smaller, predictable payments at the start or have a limited income for approval.
Example: R$ 300.000 financed over 30 years (360 payments) at 11% per year.
- SAC: the 1st payment is R$ 3.453,71 and the last one is R$ 840,61. Interest adds up to R$ 472.978,26 and the total paid is R$ 772.978,26.
- Price: every payment is R$ 2.740,07. Interest adds up to R$ 686.426,00 and the total paid is R$ 986.426,00.
Price starts R$ 713,64 cheaper per month, but costs R$ 213.447,74 more in total. Fill in the calculator with your own numbers to see both tables side by side.
What weighs most in the calculation
- Interest rate: small differences add up to tens of thousands of reais over 30 years.
- Down payment: the bigger it is, the smaller the amount financed and the interest.
- Insurance and fees: they are usually charged every month. Enter the amount to see the real payment.
- Extra amortization: paying installments in advance reduces the outstanding balance and future interest.
Down payment and term: how much they change the cost
Property of R$ 400.000, rate of 11% per year, Price table. The down payment and the term change the payment and the total interest a lot:
| Scenario | Amount financed | Payment | Total interest |
|---|---|---|---|
| 20% down payment, 30 years | R$ 320.000 | R$ 2.922,74 | R$ 732.187,73 |
| 30% down payment, 30 years | R$ 280.000 | R$ 2.557,40 | R$ 640.664,27 |
| 20% down payment, 20 years | R$ 320.000 | R$ 3.190,84 | R$ 445.802,25 |
| 20% down payment, 35 years | R$ 320.000 | R$ 2.869,46 | R$ 885.171,83 |
Raising the down payment from 20% to 30% lowers the payment by R$ 365,34 and the interest by R$ 91.523,46. Shortening the term from 30 to 20 years raises the payment by R$ 268,10, but cuts R$ 286.385,48 of interest. The longer the term, the smaller the payment and the higher the total cost.
Costs beyond the payment
The bank charges mandatory insurance (death and permanent disability, and physical damage to the property) and, when you sign, a property appraisal fee. Outside the contract, there is the ITBI (the municipal property transfer tax) and the deed and registration costs at the notary's office (cartório). Enter the monthly amount of insurance and fees in the calculator to see the real payment, and ask the bank for the Total Effective Cost (CET) of the offer.
How much of your income to commit
In general, banks limit the payment to about 30% of gross household income. The payment of R$ 2.922,74 in the first scenario would require an income of approximately 2922,74 ÷ 0,30 = R$ 9.742. If your income is lower, the way forward is to raise the down payment, extend the term or finance a smaller amount.
Extra amortization and use of funds
Paying part of the outstanding balance in advance reduces future interest and can shorten the term or lower the payment. The 13th-month salary (an annual extra payment under Brazilian labor law) is a common source for this: work out the amount in the 13th-month salary calculator and see the effect by simulating a financing with a smaller balance. Depending on the program, the FGTS (Brazil's workers' severance guarantee fund) can also be used for the down payment or for amortization, as long as the rules are met.
Finance or invest the difference?
If the financing rate is higher than the net return on your investment, paying down the debt usually pays off. Compare in the compound interest calculator how much the same money would earn if invested. For quick calculations, such as the percentage of the down payment, use the online calculator: 20% of R$ 400.000 is 400000 × 20%, that is, R$ 80.000.
Financing by amount and term
See the payment, the interest and the income required for each combination in the financing table by amount and term, or pick a scenario:
- R$ 200 thousand financed over 20 years
- R$ 200 thousand financed over 30 years
- R$ 200 thousand financed over 35 years
- R$ 300 thousand financed over 20 years
- R$ 300 thousand financed over 30 years
- R$ 300 thousand financed over 35 years
- R$ 400 thousand financed over 20 years
- R$ 400 thousand financed over 30 years
- R$ 400 thousand financed over 35 years
- R$ 500 thousand financed over 20 years
- R$ 500 thousand financed over 30 years
- R$ 500 thousand financed over 35 years
Frequently asked questions
What is the difference between SAC and Price?
In SAC the amortization is constant and the payments decrease over time. In Price the payments are fixed and the amortization grows over the course of the contract.
Which system has less interest in total?
In general SAC, because the outstanding balance falls faster at the start. The calculator shows the exact difference for your case.
How do I convert an annual rate into a monthly rate?
The calculator uses the equivalent rate: (1 + annual rate)^(1/12) − 1. If you enter the rate already as a monthly rate, it is used as is.
Does the result include the TR, insurance and the CET?
Insurance and fees can be entered as a fixed monthly amount. The TR/IPCA adjustment and the full CET are not included: check the bank's offer.
Can I download the table?
Yes. Choose SAC or Price and use the “Download CSV” button to open the table in Excel or Google Sheets.
Is it worth making a bigger down payment?
In general yes: a smaller amount financed means a smaller payment and less interest. In the example of R$ 400.000 at 11% per year over 30 years, raising the down payment from 20% to 30% saves R$ 91.523,46 in interest. Compare it with what the money would earn if invested.
What income do I need to finance a property?
As a common rule, the bank limits the payment to about 30% of gross household income. A payment of R$ 2.922,74 calls for an income close to R$ 9.742. Each bank has its own policy, and the credit analysis considers other factors.
Sources and references
Informational content only, not legal, accounting or financial advice. Always check the official sources.