Spread 0% on home loans? Pay attention to the fine print.

Hiring a home loan with 0% spread? Consult a credit intermediary to understand if it is worth it and to simulate your specific case. At Poupança no Minuto we offer this free service, just contact us! Or first, read about the implications of hiring the conditions in question.

Spread 0% sim, but watch out for underlying conditions.

The proposals being promoted by banks with a 0% spread on mortgage loans always include other underlying conditions to be aware of. Let's see what they are.

In addition to having a specific deadline to adhere, this zero rate is only available for two years and with optional associated sales.  

You can apply for loans to purchase a property, renovations or transfers, with any interest rate regime, but you must link the loan to a current account at the bank with which you contract.

Please note that, in order to hire these conditions, you may still have to fulfill the following requirements:

• Direct the payment to the current account associated with the bank loan;  
• Hire a credit card with a minimum usage value of 100 euros per month;  
• Hire a consumer credit, ALD or car leasing with a minimum debt of 1,000 euros;  
• Set up two more monthly payments in the checking account linked to the credit;  
• Contract the life insurance and multi-risk insurance associated with the housing loan at the bank's partner insurance company.

A low spread doesn't mean cheaper credit.

Note that having a low spread does not directly mean you will have a cheaper credit. There are other factors that will impact the total and monthly amount you will pay for the financing.

For example, needing to have the mandatory credit insurances at the bank's partner insurer may already imply a higher cost than contracting outside the bank. You can achieve significant savings by taking out life and multi-risk insurances with another insurer, even with a higher spread.  

You should always do the math beforehand to understand what is worthwhile. To do this, request simulations from various banks and compare the terms and the total cost of each loan. This way, you can understand whether a 0% spread will actually result in a lower cost for the loan or not.

To compare credit proposals, look at two aspects: The Annual Percentage Rate (APR) and the Total Amount Charged to the Consumer (TCC).

This is because the APR represents the cost that the credit has for the customer annually, as a percentage of the loan amount, and the TCC includes the total amount that the customer has to repay to the bank throughout the entire term of the contract. Therefore, these are two measures that, with similar credit conditions, allow for comparison and selection of the lowest proposal.  

So, remember that you shouldn't just look at the spread when analyzing the cheapest proposal, because:  

• The underlying requirements may not make up for the zero rate;
• There are other charges with more weight in the cost of credit.

Even if you find promotional campaigns for mixed rate currently with a spread of 0%, it is also possible to find mixed rate campaigns with spreads above 0% cheaper. That is, you should always look at the total cost of the credit and negotiate the lowest possible cross selling.

Let's simulate your specific case? Contact the credit intermediaries of Poupança no Minuto and find out if having a 0% spread when contracting a mortgage loan could be beneficial for you!