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Have you ever thought about the best way to pay for your mortgage? Price Table and SAC (Constant Amortization System) are common options.
But which one is best for you? Today we’re going to explore these options and see which one is best suited to your plans.
Main topics:
- Definition and operation of the Price Table
- Advantages and disadvantages of the Price Table
- Definition and operation of SAC
- Advantages and disadvantages of SAC
- Differences between Price Table and SAC
- How to choose the best amortization option
What is the Price Table?
The Price Table is a financing system used in long-term loans, and has fixed monthly payments, which helps to better organize the borrower's money.
With each payment, the interest decreases and the amount you pay to reduce your debt increases.
Price Table Definition
The Price Table keeps the value of the installments the same during the financing, and the interest is calculated on what is still owed.
In this way, they are included in the installments, while the part that pays the principal grows.
How does the Price Table work?
At the beginning, the installment has more interest, and a smaller part goes towards paying off the debt.
Over time, this changes, and the portion to pay the principal increases and the interest decreases.
This makes planning easier as the installment value does not change.
Advantages of the Price Table
Using the Price Table brings several advantages, such as:
- Predictability: Fixed monthly payments help you better organize your budget.
- Initial accessibility: The initial installments are smaller, making access to credit easier.
- Simplicity: It is easy to understand and calculate the installments.
Disadvantages of the Price Table
But, the Price Table also has disadvantages, such as:
- High total cost: The total interest paid may be higher than in other systems.
- Impact of interest rates: If interest rates rise, the cost of credit could rise significantly.
- Slow amortization: At first, debt reduction is slow.
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What is the Constant Amortization System (SAC)?
THE SAC There are installments that decrease over time, and this happens because the amortizations are always the same. In addition, the interest decreases as the debt is paid off.
This system is great for those who can pay more at the beginning. This way, the total interest paid is lower.
SAC Definition
THE SAC table makes the payment installment always the same. However, the interest decreases as the debt is paid off.
How does SAC work?
In SAC, the first installment is higher, but, over time, the installments decrease, and this happens because the interest is calculated based on the outstanding balance, which decreases.
Advantages of SAC
- Payments decrease over time, making financial planning easier.
- Less interest is paid in total because the debt is paid off faster.
- It is safer for those who want to pay off the loan sooner, as the installments decrease.
Disadvantages of SAC
- The first installments are higher, which can be difficult for those with less money.
- When starting, you need to have more money to pay the first installments.
Understanding the Price and SAC Table helps you make better decisions, as it allows you to choose the best loan repayment system.
Main differences between Price Table and SAC
Choosing financing is a big decision, and comparing the Price Table and SAC helps you understand the differences.
See the main points that distinguish them:
| Aspect | Price Table | SAC |
| Plot Type | Constant installments | Decreasing installments |
| Amortization | Increasing amortization | Constant amortization |
| Interest Paid | Bigger at the beginning, smaller at the end | Bigger at first, smaller gradually |
| Financing Choice | More predictable for fixed budget | More economical in the long run |
In the Price Table, the installments are always the same, which helps to predict monthly payments. However, the interest is higher at the beginning and decreases as the debt is paid off.
The SAC has installments that decrease over time, and this causes the debt to decrease constantly. Thus, the interest becomes lower over time.
So if you can afford to pay more up front, SAC may be more cost-effective in the end.
The comparison between Price Table and SAC shows these differences, and helps you choose the best financing for you.
So, think carefully about your financial needs before deciding.
Interest Comparison: Price and SAC Table
When choosing between Price Table and SAC, it is crucial to understand the impact of interest rates.
Therefore, we will analyze how these rates affect the cost of credit in each system, which helps you better understand how they influence your personal finances.
Interest on the Price Table
The Price Table keeps the installments the same throughout the financing. However, the first payments are higher due to interest, and this makes the outstanding balance take longer to decrease.
Therefore, the interest rate has a large impact on the total cost of credit.
Interest in SAC
In SAC, the first installments are larger, but they gradually decrease, and this occurs because the outstanding balance is paid constantly.
Thus, interest is paid on a rapidly decreasing amount, resulting in savings on the total cost of credit.
Interest rate impacts
Interest rates directly affect the cost of credit, regardless of the system chosen.
The decision between Price Table and SAC can be influenced by the economic scenario and market conditions.
This is because, in periods of high interest rates, the SAC may be more advantageous due to the constant reduction in the outstanding balance and interest. In times of low interest rates, the Price Table may be better because it offers fixed installments, facilitating financial planning.
| System | Incident Interest | Advantage |
| Price Table | Higher in the beginning | Fixed installments |
| SAC | More casualties over time | Total cost reduction |
Impact of installments over time
It is essential to understand the Price Table and the SAC to see the impact of the installments.
This is because each person has unique behavior, affecting the family budget.
Initial installments in the Price Table
In the Price Table, the first installments are fixed, which brings more predictability for those who pay, and is great for those taking out their first home loan.
But remember that interest over time may be higher.
Initial installments in SAC
The SAC starts with larger installments that decrease, and this occurs because interest is calculated on the outstanding balance, which decreases.
Therefore, it is recommended for those who have more money at the beginning, as it reduces the total interest.
Amortization profile
The Price Table has an increasing profile, with more amortization at the end. The SAC has a constant profile, reducing the outstanding balance with each payment, and knowing these differences helps you choose the best option for you.
How to choose between Price Table and SAC?
Choosing between Price List and SAC may seem difficult. But it is crucial for the financial adequacy of your commitments.
This is because the decision must consider your financial profile and future goals.
Financial profile analysis
First, analyze your financial profile and see if you have the ability to pay and a stable income.
In this case, the Price Table is good for those who want fixed installments.
Long-term planning
If you want to pay off your debt quickly, SAC is better. However, if you prefer constant payments, the Price Table is safer.
| Criteria | Price Table | SAC |
| Plots | Fixed | Decreasing |
| Start of financing | Smaller installments | Larger plots |
| Early amortization | Less advantageous | More advantageous |
Therefore, when choosing between Price Table and SAC, make careful financial planning, and carefully evaluate each aspect to ensure financial stability and achieve your future goals.
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Situations in which the Price Table is more advantageous
Choosing between Price Table and SAC can be difficult, and we previously showed when the Price Table is better.
However, this varies depending on the investor’s profile and what they expect in terms of returns.
Consumer Profiles for Price Table
Those who want predictability in monthly payments usually prefer the Price Table, as this system is great for those who want fixed installments, and helps with financial planning.
Young professionals at the beginning of their careers, for example, may find the Price Table practical, especially when they have not yet reached the top of their income bracket.
Expected future income
Investors who expect to make more money over time prefer the Price Table.
This is because, if the expectation is a salary increase or promotion, paying fixed installments is easier. Thus, when income increases, the installments weigh less on the budget.
Situations in which SAC is more advantageous
Let's now see who benefits most from the SAC and how variable interest rates enter into this equation.
Consumer profiles for SAC
For those who want to save on interest, the best option is SAC, since the first installments are larger, but they decrease over time, and this causes the interest paid to decrease, bringing financial advantages.
Furthermore, those with a stable cash flow may prefer SAC, as the system reduces the total interest paid, which saves money.
Consideration of variable rates
With SAC, saving more on interest is possible if rates do not rise, and if rates vary, having smaller payments over time is a positive point.
However, if interest rates rise, the SAC is still advantageous, as the installments decrease over time, which helps to keep the family budget under control.
| Features | SAC |
| Payment plans | Decreasing installments |
| Initial accessibility | Best for steady income |
| Interest rate conditions | Best for stable or declining rates |
| Housing credit | Progressive reduction of interest rates |
Practical application cases
To understand the differences between Price Table and SAC, see real examples.
A common example is buying a property. If someone uses the Price Table, the initial installments are smaller, and over time, the interest decreases and the principal increases.
In contrast, SAC in practice has constant installments, and the interest, however, decreases over the course of the financing.
This means that the first installments are higher than in the Price Table, but, over time, the installments become smaller, making the final payment easier.
Whatever the type of financing, the choice depends on the initial budget and future expectations, since the Price Table is good for those who start with less money, and the SAC is better for those who want to pay off the debt faster and have a stable budget.
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