Home Equity Simulator

Discover the rates and installments of the Property-Backed Loan (PBL), analyze the viable credit limit (LTV) of your residence, and compare the total cost with traditional high-cost loans.

Quick Profiles:

Loan for Entrepreneurship Debt Consolidation Property Renovation

Desired Loan Amount

The amount of money you need to borrow.

Estimated Property Value

The approximate market value of your property used as collateral.

Payment Term

years

The loan amortization term.

Home Equity Interest Rate

% p.m.

The monthly interest rate charged on the PBL.

Amortization System

Estimated First Installment

$ 0.00

Total Interest Cost

$ 0.00

Total Amount Paid on Home Equity

$ 0.00

LTV (Loan-to-Value Ratio)

0.0%

Savings vs. Personal Loan

$ 0.00

Savings vs. Payroll Loan

$ 0.00

Market Interest Rate Comparison

Home Equity Installment Composition

General Comparison of Modalities

Credit Modality	Average Rate	Projected Term	Initial Installment	Total Interest	Total Amount Paid

What is Home Equity (PBL) and how does it work?

The Home Equity (also known as Property-Backed Loan - PBL) is a personal credit line where the borrower pledges a residential or commercial property as collateral for the loan.

Main Advantages of Property-Backed Loan

Low Interest Rates: Since the loan is backed by a physical asset (the property), the risk of default for the bank decreases significantly. As a result, interest rates are typically lower than those of other credit lines, such as personal or revolving loans.
Extended Terms: Unlike regular loans, which typically have a maximum term of 5 years (60 months), Home Equity loans can be amortized over 15 or 20 years (180 to 240 months).
Healthy LTV: The credit limit is usually capped at 50% to 60% of the property's appraised value. This ratio is known as the Loan-to-Value (LTV) and provides security for both parties.

Risks of Home Equity

Risk of Collateral Execution: Since the property is pledged as collateral, if the borrower fails to make installment payments, the bank has the legal right to initiate the consolidation of the property and auction it off to pay the outstanding debt.

Therefore, Home Equity loans should be taken out with extreme caution and rigorous budget planning, prioritizing the repayment of other high-cost debts or high-return investments.

Frequently Asked Questions

Yes! Most Brazilian banks allow Home Equity loans on properties that are still being financed, a process known as "intervening guarantor". The new bank will use part of the loan amount to pay off the outstanding mortgage debt with the original bank, and the remaining balance will be deposited into your checking account.

Generally, yes, the property owner must be the borrower or guarantor on the loan contract. Properties owned by third parties (such as relatives) may be accepted by some institutions, provided the owner signs the contract agreeing to the collateral.

Similar to buying a property, there are costs associated with the physical inspection by the appraiser and the registration of the collateral in the property registry. There is also a tax (IOF) on the loan disbursement, which is usually incorporated into the loan balance.