Have we demystified the SPREAD concept?

The Spread is directly linked to home loans and is the bank's profit when it grants a loan. This profit can vary from client to client, depending on how difficult it is for the bank to finance itself and the risks it accepts when making the home loan.In other words, it is one of the parts of the interest rate on a home loan.

HOW DO YOU DETERMINE THE VALUE OF THE SPREAD?

There are several factors that determine the value of the spread, including: the value of the loan, the conditions of the bank you are negotiating with and the relationship between the amount borrowed and the assets pledged as collateral.

There are some ways of lowering the value of the spread, which usually involve taking out services such as Retirement Savings Plans (PPR), salary domiciliation, credit cards and life insurance, multi-risk insurance and/or health insurance.

AND HOW IS EURIBOR LINKED TO THE SPREAD?

Euribor is the other part of the mortgage interest rate. It can be fixed, when the loan installment always remains the same; variable, which can be revised according to the Euribor term and mixed, combining the fixed and variable rate, which happens when the client starts with a fixed rate and later, until the end of the loan, changes to a variable rate. The spread and Euribor are therefore the interest rate on the loan.

You can calculate the monthly installment and the total cost of the loan without leaving the comfort of your home using an online simulator.

At Urbibarra - Promotor Imobiliário we answer all our clients' questions on these issues and any others that may arise.