How to lower the spread of my home loan?

How is the housing credit spread defined?

First, we must understand what the spread is in order to comprehend how its value is defined in each mortgage.

The spread is one of the fees associated with mortgage credit and represents the profit margin of banks, and the level of risk they incur when granting the loan. In other words, it varies according to each client. But how is it defined for each credit?

The value of the spread is determined based on factors such as credit history, income, loan amount and client's collateral.

However, the value of this fee is negotiable with the bank, under certain conditions agreed upon between the institution and the customer, as we will see shortly.

Can I reduce the spread on my housing credit?

Yes, it is possible to lower the spread of the mortgage either in the pre-approved proposal from the bank, or halfway through the contract. The credit conditions are always negotiable if you request a review from the bank.

However, that's exactly it: a negotiation. For you will have to give something in return if you want to see your spread decrease in value.

This phenomenon is called the spread bonus. Similarly, if the spread is increased, it is called a penalty.

But in order to have a bonus on the spread, the bank asks you to hire financial products associated with your home credit.

For example, you may need to acquire a debit card, credit card, set up direct deposit to your credit account, hire the required insurance through the insurer associated with the bank, or add savings products, such as a savings account or a retirement savings plan (PPR).

To exemplify, consider that the bank suggests a spread of 1.5% for your housing loan. However, by negotiating, if you subscribe to the required insurances through the bank's insurer, they propose a spread of 1.2% instead. They offer a spread bonus in exchange for internal insurance contracting.

Is a lower spread always worth it?

However, you must be aware that a lower spread does not always mean that your mortgage becomes cheaper.

Given the financial products that you hire in exchange, it may not be worth it. In other words, envisioning that with a mortgage of 200 thousand euros and a spread of 1.5% would pay a monthly installment of 843 euros. However, lowering the spread to 1.2%, through the hiring of the required insurance at the bank, the monthly installment would drop to 811 euros.

Considering that within the monthly installment of 843 euros, the value of the required insurance is already included. If, with the spread discount, you would save 32 euros, it wouldn't be difficult to find another solution where you could save more. That is, imagining that you contracted the required insurance outside the bank and got an even lower value (savings greater than 32 euros), it would be more worthwhile to choose this option instead.

Therefore, downloading the spread is not always the most advantageous solution if you are looking to save. So, it is always important to do the math before making the final decision.

For this, you can ask for help from a credit intermediary who handles all negotiations and presents you with the most beneficial solutions for your case, according to your goals. Credit intermediaries from Poupança no Minuto are available through a free service to assist you throughout the entire process.