What does the spread represent in mortgage loans?
Are you going to hire a housing credit and come across the concept of spread? This is one of the rates associated with this loan and may vary depending on several aspects. Understand how spread works so that you have a rate tailored to your wallet.
Home loan: What is the spread?
In mortgage credit, the spread is one of the interest rates associated with the loan and represents the profit margin of the banks. The value of this rate is applied by each bank to each client, since it is determined through the credit history, income, loan amount, and guarantees provided by the consumer.
So, the value of the spread will depend, mostly, on the level of credit risk. This is because it is a rate that represents the risk of default by a customer.
That is, the higher the borrower's effort rate, the higher the spread will be. If the credit holder does not provide guarantees, the spread will be penalized. But it can also be rewarded, depending on certain factors, as we will see below.
What is the impact of spread on credit?
It is also important to mention that banks often offer a bonus on the spread if you hire other financial products for the loan.
This can happen in the following cases:
- Debit or credit card hiring;
- Salary domiciliation to credit account;
- Buy the required insurance, life and multirisk, through the bank;
- Add savings products, such as a savings account or a retirement savings plan.
For example, imagine that a certain bank offers you a spread of 1.2% on your mortgage. However, if you subscribe to the required insurance policies (life and multi-risk) through the insurance company associated with the bank, the institution proposes a spread of 1%.
Is the credit with the lowest spread the cheapest?
No. Not always the home loan with the lowest spread represents the cheapest.
The value of the spread impacts what you will pay for credit in monthly installments, but it is not the only factor to consider.
Even with a bonus on the spread, credit can be more expensive due to other parameters. Such as required insurance, the Nominal Annual Rate (TAN), the Effective Annual Global Rate (TAEG), whether the rate is variable indexed to Euribor or fixed rate, and other charges associated with credit will impact the amount you pay monthly.
It is important to always proceed with accounts that support your analysis. For example, if you choose to subscribe to the insurance required outside the bank, even with a penalty in the spread, it may be possible to get a lower monthly installment.
Therefore, when studying the ideal spread for your credit, you must take into account that its value does not indicate, on its own, the cost of credit and that it may vary according to other conditions and products added to the loan.
Can I change the spread at any time during the contract?
Yes. It is possible to request a change in the conditions of your mortgage credit at any time during the contract, by requesting a renegotiation of the contract terms with the bank.
However, to lower the spread, you may need to hire the financial products mentioned above in order to receive a bonus in the value.
You should also know that, if you do not want to change the spread, the bank cannot do it for you without consent and without renegotiating the conditions by mutual agreement.
If you want to renegotiate the conditions of your home loan, even after a first proposal from the bank, you can always turn to a credit intermediary. A mediator like those at Poupança no Minuto is on your side throughout the entire process, so that you can get the credit terms that best fit your reality.