Price versus SAC on a Brazilian home loan

The choice in one paragraph

Brazilian home loans are often offered as Tabela Price or SAC. Price keeps the installment flat. SAC keeps the principal repayment flat, so the installment starts higher and falls. On the same financed amount, nominal rate, and term, SAC usually costs less interest and demands more cash in the early months. The Price vs SAC calculator draws both paths. It is not a U.S. mortgage quote and it does not pretend to be one.

The formulas in plain English

Both systems on this page use a nominal annual rate divided by 12. That is a common way Brazilian contracts state interest before indexers and insurance. It is not an effective annual rate, and it is not a U.S. APR.

Price installment = P × [r(1+r)^n] / [(1+r)^n − 1]
SAC principal each month = P / n
SAC installment = principal + balance × r

P is the financed amount. n is years times 12. Price is the same level-payment math as a fixed principal-and-interest loan elsewhere. SAC pays the loan down in equal principal slices and adds interest on whatever balance is left.

A worked example

Finance 300,000 at 10% nominal for 30 years, which is 360 months. The Price installment never changes. The first SAC installment is larger: a full month of interest on 300,000 plus 300,000 ÷ 360 of principal. The last SAC installment is close to that principal slice alone, because little balance remains to charge interest on. Total SAC interest is lower. That gap is the lesson. It is not proof that the first SAC installments fit a household budget.

Scenario B repeats the pair at another term or rate — 20 years beside 30, for example. The charts show Scenario A. Scenario B’s totals sit in the cards.

How to read the result

Look at three numbers together: the Price installment, the first SAC installment, and interest saved with SAC. If the first SAC payment does not fit, the interest savings are theoretical. The balance chart shows SAC falling in a straight line and Price falling slowly at first, then faster. The payment chart shows Price flat and SAC stepping down at each year-end.

Switch the site currency to BRL if you want the labels in reais. The formula does not change when the currency changes.

This page leaves out TR, IPCA, the savings-account indexer, MIP, DFI, and CET. Those decide a real Brazilian installment as much as Price versus SAC does. For a level payment with optional U.S.-style tax and insurance, use the mortgage payment calculator. For a single Price month-by-month table, use the amortization schedule. A fixed-rate refinance break-even, which is a different question, is on the refinance calculator.

FAQ

Is Price the same as a U.S. fixed payment?

The principal-and-interest math matches. A U.S. payment often also bundles tax and insurance. A Brazilian contract often adds an indexer plus MIP and DFI. Those pieces are outside this comparison.

Why does SAC cost less interest?

You pay principal faster, so later months charge interest on a smaller balance. The trade-off is a heavier installment at the start.

Should I type an effective annual rate?

No. Divide a nominal annual rate by 12 inside the tool by entering the nominal rate. An effective rate would overstate the monthly charge if you drop it in unchanged.

Is this financial advice?

No. It is a teaching model of two amortization systems. Your contract, indexer, and insurance set the installment you actually owe.

Try it with your figures

Open Price vs SAC, enter the financed amount, nominal rate, and term in years, and compare the first SAC installment with the flat Price installment before you look at total interest. The calculation stays in the browser. Switch the site language to Português for the version written first for Brazilian readers.