Mortgages and consortiums are ways to acquire high-value goods, but they work very differently. Understanding these differences is essential to make the best choice.
How mortgages work
In a mortgage, you receive the money immediately and pay installments with interest over time. It's ideal for those who need the asset now.
Advantages
- ✓ Receive the asset immediately
- ✓ Defined term and payments
- ✓ Can use FGTS (real estate)
Disadvantages
- ✗ Pay interest (high total cost)
- ✗ Requires down payment
- ✗ Strict credit analysis
How consortiums work
In a consortium, you participate in a group and are contemplated by lottery or bid. There's no interest, but there's an administration fee.
Advantages
- ✓ No interest
- ✓ Lower payments
- ✓ Savings discipline
Disadvantages
- ✗ Don't know when you'll be contemplated
- ✗ Administration fee
- ✗ Annual payment adjustment
Direct comparison
For a $500,000 property over 180 months:
Mortgage
- • Down payment: ~$100,000 (20%)
- • Initial payment (SAC): ~$5,555
- • Total paid: ~$770,000
Consortium
- • Down payment: $0
- • Average payment: ~$3,472
- • Total paid: ~$625,000
When to use each one?
Mortgage
Use mortgage if you need the asset now (already have paid housing) and have down payment available.
Consortium
Use consortium if you can wait, have no urgency and want to pay less overall.