FINE

The current FINE model replaces the previous FIN-Standardized Information Sheet and has been in force since 1 January 2018, based on Decree-Law No. 74-A / 2017 (23 June 17) and results from the partial transposition of European legislation (Directive No. 2014/17 / EU, of 4 February 2014), on consumer credit agreements for residential properties.

What is FINE for?

FINE aims to provide consumers with harmonized documentation in order to compare different credit proposals, in order to contribute to a more conscious decision-making by the borrower (s) or any guarantors .

FINE present in all the countries of the European space ends up with a scenario of disorder and misinformation installed in this branch of activity, through the multiple models of mortgage credit proposals that existed until then. Its entry into force contributes to a more transparent relationship between credit agents and consumers, providing simplified information with greater detail and quality. Finally, FINE is part of a set of measures that aim to safeguard the excessive indebtedness of people and companies and reduce default rates.

What information does FINE contain?

FINE contains information on the main characteristics of the loan, namely:

• Bank entity identification information;
• Characteristics of the credit agreement: type and description of the financing, total loan amount, conditions of use and bank guarantees, payment term and interest rates applied, namely:
  • Annual Global Rate of Charge or APR ;
  • Annual Nominal Rate or TAN , applicable to the loan according to the type of interest rate (fixed, variable or mixed rate), agreed between the bank customer and the credit institution;
• Other charges associated with the loan, such as commissions, expenses, required insurance and other costs ;
• The loan amount and the total amount to be repaid ( MTIC );
• The frequency and amount of the installments ;
• Proposal deadline and information regarding theterm of validity of the conditions presented in the FINE in question;
• Information on financial products and services contracted as optional associated sales , if applicable.

When do you need FINE?

FINE will be delivered to the bank customer in two moments: at the time of the loan simulation, based on the information provided by the customer to the bank and in a second moment, before the deed and after the credit approval. This final document will have to reflect the characteristics of the loan effectively approved by the institution. FINE must be part of the file of documents necessary for the Deed of Purchase and Sale of the Property.

In what situations does FINE apply?

Both FINE and Additional to FINE (see below) are applicable to mortgage home loan agreements entered into with consumers, covering the following scenarios:

• Credit Contracts for the acquisition or construction of permanent, secondary or rental housing , with or without mortgage guarantee;
• Credit Contracts for the acquisition or maintenance of property rights over existing or projected land or buildings ;
• To other Credit Contracts that, regardless of the purpose, are guaranteed by a mortgage or by another equivalent guarantee usually used on real estate, or guaranteed by a real estate right, namely real estate leasing contracts.

FINE - Additional Information

In addition to this document, Banco de Portugal obliges all institutions that provide home loans to deliver to the bank customer another document: Additional to FINE.

This document contains other relevant elements, namely, optional associated sales, if applicable, and other situations likely to affect the cost of the loan (such as any promotional campaigns), the documentation to be made available by the bank customer for the purpose of granting credit and the loan repayment.