0% credit spread for housing? Watch out for the fine print.

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

Spread 0% similar, but pay attention to underlying conditions.

The proposals being promoted by banks with a 0% spread on home loans always have other underlying conditions that should be noted. 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 join in loans for the acquisition of property, construction, or transfer, with any of the interest rate schemes, but you must associate the loan with a current account in the bank you hire.

Note also that, in order to contract these conditions, you may still have to meet the following requirements:

• Direct debit the payment to the current account associated with the bank loan.
• Hire a credit card with a minimum usage value corresponding to 100 euros monthly.
• Hire a consumer credit, ALD or car leasing with a minimum debt of 1,000 euros.
• Set up two monthly payments to be debited from the current account linked to the credit.
• Hire life insurance and multi-risk insurance associated with home loans at the bank's partner insurance company.

A low spread does not mean cheaper credit.

Note that having a low spread does not directly mean that 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 insurance at the bank's partner insurer may already imply a higher cost than hiring outside the bank. It is possible to achieve great savings by hiring life and multi-risk insurance in another insurer, even with a higher spread.  

You should always calculate in advance to understand what is best. Ask for simulations from various banks and compare the conditions and total cost of each loan. This way, you can understand if a 0% spread will actually result in a lower cost in credit 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 credit has for the customer annually, as a percentage of the amount borrowed, and the Total Amount Repayable includes the total amount that the customer has to repay to the bank over the entire term of the contract. Therefore, these are two measures that, with similar credit conditions, allow for the comparison and choice of the lowest proposal.  

So, remember that you should not only look at the spread when analyzing the cheapest proposal, because:  

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

Even if you find promotional campaigns with a mixed rate currently at 0% spread, it is possible to find mixed rate campaigns with a spread above 0% cheaper. In other words, you should always look at the overall cost of the credit and be able to negotiate the lowest possible cross-selling.

Let's go to the simulation of your specific case? Contact the credit intermediaries from Savings in a Minute and find out if having a 0% spread when taking out a mortgage credit could be beneficial for you!