Portability costs: what are they and how does it work in practice?

Portability costs: what are they and how does it work in practice?

Due to reductions in the Selic rate, which acts as the basic interest rate for the Brazilian economy, there was an increase in the demand for real estate financing. However, for agents with a contract for some years, rates may be higher than the market average. To deal with this issue, it is possible to choose to migrate this debt to another institution that offers better conditions. But in order for this to occur, some portability costs must be considered.

If your current loan is weighing on your budget, the possibility of transferring that funding to another institution may be a solution. However, in order to know if this is really a good strategy to be adopted, it is necessary to observe some relevant information.

If you still don’t know whether to opt for portability, read on and see, in this post, what the main costs of this change are. Check out!

How does the portability of real estate financing work?

Since a mortgage loan usually extends over many periods, interest also tends to accompany the installments.

Thus, normally, the search for portability occurs due to better conditions in relation to the interest rate, mainly due to the historic reduction in the Selic rate. Other factors can still weigh in this decision, for example, customer service and the type of assistance provided during the amortization time of the real estate financing.

Before considering portability, it is necessary to gather some important data about the loan. Such information should include the amount of the debt, the time remaining for the settlement of the credit, the interest rate, the charges and insurance contracted, among others.

All of this information is included in the Total Effective Cost statement, the CET, which can be requested from the hiring bank. In addition to these data, it is important to have a copy of the current contract and the updated balance due. With all this data, it is easier to search for other institutions with more attractive offers.

What are the costs of portability?

Before deciding whether or not to choose portability, it is necessary to compare all the total costs of this action with the benefits of changing financial institutions. With a careful evaluation of these data, it is possible to identify whether portability is a good choice at the moment.

Property Valuation 

One of the first costs in the portability request process is the evaluation of the property. This is a standard procedure and normally costs around R $ 3 thousand to RS 3.5 thousand reais for residential properties.

Credit opening

When opting for portability, it is necessary to choose another institution to close the deal. An extra portion of the cost that is often ignored are the costs related to opening credit, creating an account at the institution and preparing a register. Each entity has a different contract cost structure, so it is worth checking which options are more attractive in the market and seeking the opinion of experts in this field to make better choices.

Transfer costs 

When you break your link with one financial institution and create a link with another, there are some contractual and transfer costs. These amounts may vary depending on each real estate registry that is responsible for this bureaucratic part of the transaction and also on the creation of a new fiduciary alienation agreement.

Bank fees

In addition to the interest differential, another important point to be considered is the amounts charged for bank fees. Usually, this information is not so clearly established and can contribute to generating significant costs when having the credit approved in the financing.

You must also observe the insurance policy that the institution you intend to migrate to uses. Many loans are accompanied by mandatory insurance that adds costs to the loan.

left hand typing on a calculator and right hand holding a house thumbnail

How to do portability in practice?

When choosing a new financial institution, the request is made by the entity hired at the Interbank Payments Chamber (CIP). After registering the request in the system, the original institution has 5 business days to fulfill the request or send a counter-proposal to the client. If it is advantageous, the customer can keep the original contract and the transfer procedure is automatically interrupted.

Otherwise, the original bank forwards the necessary data for the proposing entity to complete the portability of the real estate financing. Thus, the institution that will receive the portability makes the payment to the original institution, making the early settlement of the financing, usually via Electronic Transfer Available (TED).

One of the most common questions from customers is about the original bank’s acceptance of this type of request. For this reason, it should be noted that the bank cannot deny the portability request and, normally, seeks to negotiate new contract conditions to keep the customer.

In the event of a bank refusal, it is important to check with those responsible for the institution that led to this denial. For unjustifiable reasons, it is advisable to contact the customer service (SAC) or the Ombudsman of the initial financial institution. In the worst case, it is possible to file a complaint with the Central Bank in search of clarification.

Is it worth opting for portability?

The safest way to check whether portability is worthwhile is to carry out financing simulations at other entities and with the help of specialized professionals to evaluate such results. With these data it is possible to establish which costs portability will bring and also what savings in terms of interest will occur due to the exchange.

The important thing is to be aware of all the costs involved in the process. Some banks, for example, may have a lower interest rate, but charge numerous rates and insurance related to financing. Thus, in order to make a good deal it is necessary to be aware of all the conditions of new financing. Thus, portability is always valid if there is an advantage in terms of cost differentials in relation to benefits.

However, estimating the costs of portability and interest differentials is not a simple task that can be carried out lightly. Therefore, it is worth opting for a specialized consultancy such as that of CrediPronto, which will make all these calculations and assist in the portability process if this is the best choice for your case.

In addition to the consultancy, she will offer more information about your situation at the time of choice. You will also have more peace of mind, the result of a safe and accurate assessment of your project.

If you are in need of help to better understand the portability costs of your financing, follow our other posts by subscribing to our newsletter!