SAC Extra Amortization Simulator

Extra Amortization in the SAC System

Under SAC (Sistema de Amortização Constante / Constant Amortization System), the principal is paid down in equal monthly chunks, and interest is charged on whatever balance is still outstanding. You work out the installment with PMT₃ = (P / n) + (saldo₃ × i). Because of that, payments start high and taper off as the debt comes down. When you throw in an extra payment, it comes straight off saldo₃, so every interest charge after that is smaller too.

You can put that extra contribution to work two ways. The first, reduce term, keeps your installment where it is and shaves months off the loan; it tends to make the most sense when rates are high. The second, reduce installment, leaves the maturity date alone and just lightens the monthly outflow. One thing to keep in mind: Brazilian banks are obliged to disclose the CET (Custo Efetivo Total) under Bacen Resolution 4.197/2013, and that figure rolls in interest, IOF, insurance and fees. The headline rate on its own always looks cheaper than the loan really is.

Applications

For mortgages, SAC is the system you'll run into by default at Caixa Econômica Federal, Bradesco and Itaú, and it's especially common on Minha Casa Minha Vida and SBPE loans. You'll also see it on vehicle financing, consigned credit and BNDES infrastructure lines. A handy use for this calculator: model what happens when you put your yearly 13th salary or an FGTS withdrawal toward extra amortization.

FAQ

Is SAC better than Price? SAC charges less total interest, since the principal falls away faster. Price, on the other hand, gives you a constant installment that's easier to fit into a tight budget. Once you start making extra payments, SAC usually comes out ahead.

Can the bank charge a prepayment fee? No. Bacen Resolution 3.516/2007 bans prepayment fees on any loan signed after December 10, 2007.

Should I prepay or invest? Hold your loan's CET up against the after-tax return on conservative options like a CDB or Tesouro. If the CET is the bigger number, prepaying is the better move.