Crédito habitação: O que significa carência e diferimento de capital?

Mortgage loan: What does capital deferment and grace period mean?

Do you need to renegotiate your home loan because you can't afford high monthly payments right now? Forbearance and capital deferment may be the ideal solutions for you. Learn about both processes in this article.

03 Oct 20234 min

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If you are looking to save on your monthly mortgage payments, the credit intermediaries of Poupança no Minuto can help you with the available options. Forbearance and capital deferment are two ways you can choose from: find out how they work next.

Two short-term savings solutions in home credit.

For those in need of short-term savings on their home loan, there are several solutions that can help. Such as grace period and capital deferment. Both allow reducing the amount you pay in monthly installments in the initial period.  

What can bring advantages if you are renegotiating conditions because you are in a more financially sensitive context. This is because these are two solutions that are not currently available for new financing. They are only to be considered for customers with financial vulnerabilities in the face of rising interest rates and difficulties in paying installments.

However, in the long run, these options also bring disadvantages. So, let's see how they work.  

Capital deficiency means paying only interest first 

The lack of capital means that, during a grace period, only the interest associated with the home loan is paid in the monthly installment. In other words, during this period, the outstanding loan amount is not paid.

As a rule, a mortgage payment consists of the outstanding amount plus associated interest. Therefore, during the capital grace period, only the lower amount (interest) needs to be paid.

The period can vary from bank to bank, ranging from six to 24 months. This means that during this time the amount you pay for housing credit is lower. However, after the grace period, the monthly installments will be higher than in a housing credit that did not have a capital grace period.

Let's see an example: in a 35-year loan, if you choose to have a capital grace period of 12 months, the actual debt will be settled in 34 years, as for one year you only pay interest. This means that after the 12 months, the monthly installment will be higher.

Please note that the interest rate will also be higher, because during the period in which you will be paying back the loan, interest will be calculated on the full amount. Therefore, the total cost of credit will be higher compared to a loan without a capital grace period.  

Capital deferral "pushes" part of the loan to the end

Capital deferment is another option to relieve the monthly installment of housing credit, which means “pushing” part of the loan to the end of the contract.  

This means that part of the outstanding amount is left to be repaid in the last installment of the loan. Typically, this portion corresponds to 30% of the total mortgage value.  

For example, if the loan you requested from the bank was 200,000 euros with a deferred capital of 30%, it means that in the last installment of the credit you will pay 60,000 euros. This will naturally reduce the amount of the monthly installments of the credit for the remaining repayment term.

However, you must ensure that you actually have the deferred amount to be settled in the last installment of the contract. Even though the monthly installments decrease over the repayment term, the cost left for the final installment can be high and may even require you to take out a new loan to settle it.

The portion of capital paid in each installment will be lower in this option: for example, in the case of a loan of 200,000 euros, you only pay installments related to 140,000 euros of capital. But make sure you will have the ability to cover the remaining 60,000 euros in the end.

In addition, by amortizing less capital of the loan during the repayment term, the interest value will be higher since it applies to the total capital (including the last installment).  

Need help to advance with any of these processes? Contact Poupança no Minuto for a free, fast and personalized service. Credit intermediaries will take care of your process promptly, to renegotiate conditions and start saving with your mortgage credit as soon as possible.    


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