Real Estate Financing: How It Works, SAC vs Price, and CET

Real estate financing is one of the most common ways to acquire a property in Brazil: the bank pays most of the value and you repay it in monthly installments over years, with interest. In practice, financing can cover up to 90% of the property's appraised value when using the SAC or Sacre system, which implies a typical minimum down payment of around 10% — subject to bank analysis. Before contracting, it is essential to compare the CET (Total Effective Cost), not just the advertised interest rate, because it combines interest, insurance, and fees and shows the total cost at the end of the contract. This guide explains how it works, the difference between SAC and Price, the role of fiduciary alienation, and the risks

involved — without promising approval, rate, or installment value.

What is real estate financing and how does it work

Real estate financing is a long-term credit extended by a financial institution for the purchase of a property, with the property itself serving as collateral. In Brazil, real estate credit operations using funds from SBPE (Brazilian Savings and Loan System), SFH (Housing Finance System), and SFI (Real Estate Financing System) follow rules established by the Central Bank of Brazil, in particular BCB Resolution No. 4,676.

The basic operation is simple: you make a down payment, the bank finances the remainder, and you pay in monthly installments that include principal amortization and interest. Throughout the entire contract period, the property remains under fiduciary alienation as collateral until full payment — that is, the bank holds fiduciary ownership of the property while the contract is active. This reduces risk for the institution and, therefore, allows long terms and lower rates than other personal credit modalities.

Who can finance

Any legal-age individual with proven income and a clean credit record can apply for real estate financing. The bank analyzes:

• Monthly income and commitment to other debts;
• Credit history and score;
• Property appraised value, which may differ from the purchase price;
• Available down payment and ability to pay installments.

Approval depends on each institution's credit analysis. There is no guarantee of approval, and conditions vary from bank to bank.

Amortization systems: SAC vs Price

The way installments are calculated depends on the chosen amortization system. The two most common in Brazil are SAC (Constant Amortization System) and the Price table.

Under the SAC system, installments start higher and decrease over time, because principal amortization is constant. Under the Price table, installments are fixed from start to finish, with amortization growing progressively as interest decreases.

Illustrative numerical example

Consider a financing of R$ 300,000.00 over 240 months (20 years), with a hypothetical interest rate of 10% per year (nominal, equivalent to 10%/12 ≈ 0.833% per month). The values below are illustrative and serve only to compare the behavior of the two systems, using the same rate convention for both:

• SAC: monthly amortization is constant at R$ 1,250.00 (R$ 300,000 ÷ 240). The first installment would be approximately R$ 3,750.00 (R$ 1,250 amortization + R$ 2,500 interest), gradually decreasing to about R$ 1,260.00 in the last one. The total interest paid would be lower.
• Price Table: the installment would be fixed at approximately R$ 2,895.00 throughout the entire contract. The total interest paid would be higher than under SAC.

Attention: these numbers are simulations with explicit assumptions, not promises of rate or installment. Actual conditions depend on the bank, the appraised value, the term, and the rate in effect on the contract date.

Which one to choose?

There is no single answer. SAC tends to be more advantageous for those who can afford higher initial installments and want to reduce total cost. The Price table is more suitable for those who prefer predictability and constant installments throughout the entire contract, even paying more interest overall.

What is CET and why compare it

CET (Total Effective Cost) is the indicator that shows the total cost of financing at the end of the contract, including interest, insurance, and fees — not just the advertised interest rate. It is essential for comparing offers from different banks, because two proposals with the same interest rate can have different CETs due to fees, insurance, and other expenses.

When comparing financing options, always look at the CET, not just the interest rate. A bank may advertise a lower rate but charge fees and insurance that make the total cost higher. The CET levels this comparison.

What goes into CET

CET includes, among others:

• Contract interest rate;
• Property appraisal and registration fees;
• Mandatory insurance (such as housing insurance);
• Registration costs and other ancillary expenses.

Therefore, when receiving a proposal, ask the bank for the CET statement and compare it with other offers before signing.

Minimum down payment and general financing rule

Under the general SFH/SBPE rule, financing can reach up to 90% of the property's appraised value when using the SAC or Sacre system, which usually implies a down payment of around 10% — subject to bank analysis. This percentage is a regulatory ceiling established by BCB Resolution No. 4,676; the actual down payment may be higher depending on each institution's credit policy and the buyer's profile.

In practice:

• The larger the down payment, the smaller the financed amount and, consequently, the lower the installments and total interest;
• The property's appraised value may differ from the purchase price — the bank finances based on the appraisal, not the negotiated price.

Important: do not promise or expect a fixed down payment. The exact percentage depends on credit analysis and the conditions of each financial institution.

Fiduciary alienation: the property as collateral

In real estate financing, the property remains under fiduciary alienation as collateral until full payment. This means that, while the contract is active, the bank holds fiduciary ownership of the property and has it as collateral for payment. You have the right to use and live in the property, but full ownership is only transferred after the last installment is paid.

This mechanism protects the bank against default: if the buyer fails to pay, the institution can repossess the property through legal proceedings. For the buyer, fiduciary alienation usually results in lower rates than other collateral types, because it reduces the creditor's risk.

What happens in case of default

If installments are not paid, the bank can initiate the property repossession process. The procedure follows legal rules, and the buyer is notified before any measure is taken. In general, there is a period to regularize the debt. If the debt is not settled, the property may be auctioned to pay the outstanding balance.

Therefore, before financing, assess your long-term payment capacity and maintain an emergency reserve for unforeseen events.

Step-by-step to contract financing

1. Simulate and compare: use simulators from different banks and compare the CET, not just the interest rate.
2. Set aside the down payment: have the down payment available before starting the process.
3. Choose the property and have it appraised: the bank appraises the property to define the financeable amount.
4. Gather documentation: ID, CPF, proof of income, proof of residence, and property documents.
5. Submit the proposal to the bank: the institution analyzes credit, income, and the property.
6. Sign the contract: after approval, sign the contract with the agreed conditions.
7. Register the fiduciary alienation: the contract is registered at the notary's office, and the property remains as collateral.
8. Pay the installments: monitor the outstanding balance and consider extra amortizations when possible.

Risks and limitations

Real estate financing is a long-term commitment and involves risks that need to be considered:

• Prolonged indebtedness: the contract can last decades; changes in income can compromise payment.
• Interest and CET: the total cost can be significantly higher than the property's value.
• Default and loss of the property: in case of delay, there is a risk of repossession.
• Changing rules: SFH limits, interest rates, and CET rules change frequently. Verify current conditions with the financial institution and official sources before contracting.
• Opportunity cost: the money used for the down payment and installments could have other uses; assess whether financing is the best option for your life stage.

Common mistakes when financing a property

1. Comparing only the interest rate: ignore the CET and you may pay more overall.
2. Not considering the total cost: insurance, fees, and registration increase the effective cost.
3. Financing without sufficient down payment: the smaller the down payment, the larger the financed amount and the interest.
4. Choosing the wrong amortization system: SAC and Price have different profiles; choose based on your payment capacity.
5. Not reading the contract: check all clauses, fees, and conditions before signing.
6. Not maintaining an emergency reserve: unforeseen events can compromise installment payments.

FAQ

What is the difference between SAC and the Price table?

Under SAC, installments start higher and decrease over time, with constant amortization. Under the Price table, installments are fixed from start to finish, with increasing amortization. SAC tends to have a lower total interest cost; Price offers installment predictability.

What is CET in real estate financing?

CET (Total Effective Cost) shows the total cost of financing at the end of the contract, including interest, insurance, and fees — not just the advertised interest rate. It is essential for comparing offers from different banks.

What is the minimum down payment to finance a property?

Under the general SFH/SBPE rule, financing can reach up to 90% of the property's appraised value under the SAC/Sacre system, which usually implies a down payment of around 10% — subject to bank analysis. The actual down payment may be higher depending on the institution.

What is fiduciary alienation?

It is the financing collateral: the property remains under fiduciary alienation until full payment, with the bank holding fiduciary ownership while the contract is active. In case of default, the bank can repossess the property through legal proceedings.

Is financing a property worth it?

It depends on your financial situation, the current interest rate, and the opportunity cost. Financing allows you to acquire a property without paying the full amount upfront, but it involves long-term interest. Compare the CET, assess your payment capacity, and consider alternatives before deciding.

Conclusion

Real estate financing is a powerful tool for purchasing a property, but it requires careful planning and comparison. Understand the difference between SAC and Price, always compare the CET, have an adequate down payment, and understand the role of fiduciary alienation as collateral. SFH/SBPE rules change frequently — verify current conditions with the financial institution and official sources before contracting. This content is educational and does not constitute individual credit advice or a promise of approval, rate, or installment value.

To deepen your financial planning, also see our guide on how to build an investment portfolio, understand the total effective cost in loans, and learn how to plan a large purchase before taking on a long-term commitment.