Como funciona a transferência de crédito habitação?

How does the housing credit transfer work?

Are you unhappy with your current home loan? Have you tried renegotiating the terms of the contract without success? Understand how home loan transfer works in this article.

10 Aug 20236 min

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Do you want to move forward with a housing credit transfer right now? The credit intermediaries Poupança no Minuto can help you directly, for free, quickly and accurately. But to learn more about how the whole process works, we clarify all the questions below.

Can I transfer my mortgage at any time?

Yes, it is possible to transfer your home loan at any time during the contract. Normally, there are no clauses in the contracts that limit the borrower from transferring their credit to another bank entity.

However, if they decide to proceed with the transfer, the credit holders must inform the bank where they have the contracted credit with 10 days in advance. From that point on, the bank also has 10 days to present the respective data and documents to the bank where the process will be transferred.

How do I transfer my mortgage credit to another bank?

If you are not satisfied with the conditions of your mortgage, the first step is to contact the bank. In order to renegotiate your credit, the bank can make a new proposal with more beneficial conditions.

For example, in order to lower the loan spread, the bank may propose that you purchase financial products, such as a credit card.

But if you are still dissatisfied with the conditions presented by the current bank and want to save more with the installments paid for the credit, consider transferring.

To move forward with a home credit transfer, contact other banks so they can offer you different proposals, according to the specifics of the credit and your preferences.

Afterwards, you should evaluate and compare which of the proposals will be more compensatory (if it is), considering the conditions you currently have.

What are the advantages?

The advantages will depend, of course, on each case. But, as a rule, making a credit transfer allows you to pay fewer monthly installments, through:

  • Reduction of spread, and consequently the Annual Nominal Rate (ANR);
  • Contract deadline extension;
  • Change in the interest rate modality;
  • Lower the amount you pay for required insurance policies;
  • With a new assessment, the market value of the house can rise.

What are the costs of transferring a housing credit?

Before proceeding with the transfer of your mortgage credit to a new bank, you should also consider if the process has costs.

The process may have costs, indeed. Both in the current bank and in the bank to which the contract will be transferred.

Firstly, in the bank where you have the home loan, you may have to pay a early repayment fee. This early repayment fee represents 0.5% of the capital repaid in contracts with variable interest rate (0.25% if the contract is in the last year), and 2% in contracts with fixed interest rate.

Afterwards, in the bank to which you are going to transfer, there may be costs with bank commissions such as opening or evaluation fees, and with a new deed. However, most banks cover these expenses.

How does credit transfer between banks work?

To move forward with the credit transfer process, as mentioned above, you must inform the current bank with a 10-day notice of your intention. Then, if the banks have APB protocol (from the Portuguese Banking Association), the mortgage cancellation process can be simple.

The APB protocol is an agreement among most banks, which in this case allows cancelling a mortgage at one bank in order to transfer it to another. To do this, the borrower must go to the bank where the mortgage is held to obtain the Authorization Form, signed and stamped. Afterwards, they must submit this form to the bank where they are transferring.

This is so that the bank receiving the mortgage can request the other bank to cancel it, starting from the day a new deed will be signed. The current bank must send the SWIFT code to the bank that will receive the mortgage, with electronic consultation on the mortgage cancellation term, for the deed to take effect. It is in this process that banks communicate the outstanding debt.

About this protocol, it should be noted that: there are banks that have not adhered, and others that only accept the cancellation of mortgages through this process.

Note that the bank to which you want to transfer requires the same documents that you had to present to the first bank. This is to prove your income, tax and professional situation, in order to ensure your financial capacity. It is also necessary to submit documentation related to the property.

Just like the first bank, this entity will consult the Credit Responsibilities Center of the Bank of Portugal to verify your tax history, if you have debts or default on installments.

Therefore, to ensure that the credit transfer is approved, try to settle any outstanding debt.

How to choose the best proposal to transfer my credit?

To choose the best housing credit proposal, to where to transfer your contract, you must essentially consider your preferences. What is the impact of having lower monthly payments?

For example, at this moment, in most cases, contracts with a variable rate indexed to Euribor pay more interest than contracts with a fixed rate, due to the rise in interest rates. However, it is important to emphasize that, as soon as interest rates start to decrease again, by switching to a fixed rate you will end up paying more than if you had kept the variable rate. Or, if you extend the contract term, you will also pay less immediately, but this implies paying more interest in the total credit amount.

This is to explain that there are conditions that may reduce your monthly credit installment in the short term, but in the long run the tables may turn and you end up paying more for the credit.

After taking these questions into consideration, to compare proposals between banks, look at the Effective Global Annual Cost Rate (TAN). The TAN represents the total cost of credit, with all charges, from insurance, taxes, to other associated costs. If the proposal has the same term, outstanding amount, and repayment method in various banks, the lowest APR will correspond to the cheapest proposal.

If you need help comparing proposals, understanding the new conditions and their impact on the amount you will pay, turn to a credit intermediary Poupança no Minuto. With a free service, they are available to clarify all your doubts, deal with the bureaucracy and mediate with the banks.

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