Property Purchase Process | Property Purchase Costs | Mortgage Finance

Overview:
The underdeveloped state of Brazil’s mortgage market means that foreigners cannot yet obtain a mortgage locally.  Most foreign investors will purchase in cash, often through remortgaging in their home country.  Finance from offshore lenders secured against your Brazilian property may be applicable in some instances.

If you are buying off-plan or new build, the developer may offer their own private finance package.  Typical interest rates start at 1% per month over and above inflation.  Stage payments for property purchases in Brazil are normally index-linked against inflation to ensure developers are protected in a situation of hyper-inflation.  (However, over the last five years, annual inflation in Brazil has stayed well below 10%).  During the construction period, the stage payments are index-linked to the construction price index (indice nacional da construcao civil or INCC) which reflects inflation in the construction costs; after delivery, most companies index-link repayments to the Brazilian consumer price index (indice geral de preco medio or IGPM).  The repayment term will vary between 40 and 180 months, depending on the developer and the property itself.  Most developers will require a minimum down payment of 15%-20% of the total value of the property.

You should consult with a financial advisor who will be able to talk you through your options.

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