How to Analyze the Bank's Simulation (FINE) to Save on Life Insurance for a Mortgage

The European Standardized Information Sheet (FINE)—the document containing the mortgage simulation—provides a range of relevant information related to insurance. The main advantage of knowing how to analyze it is being able to compare simulations from different institutions. But did you know that, with this analysis, you can also save on Life Insurance for a Mortgage?

A proper assessment of FINE allows you to negotiate more favorable terms with other banks and also to determine whether it is more cost-effective to purchase insurance from providers outside the bank.

But to do that, you need to understand FINE’s structure and know what points to keep in mind.

In this article, we'll explain:

• What is FINE – the European Standardized Information Sheet;
• What to Keep in Mind When Reviewing the FINE to Save on Mortgage Life Insurance;
• Why should you compare quotes for life insurance, mortgage insurance, and comprehensive property and casualty insurance?.

Here's how to analyze the FINE so that the decisions you make when taking out a mortgage are the most advantageous for you.

What is the FINE—European Standardized Information Sheet?

When you run a mortgage simulation, the bank provides the European Standard Information Sheet (ESIS). This is a mandatory document, established by the Bank of Portugal, for mortgage loans and mortgage-backed consumer loans.

With the creation of FINE, the Bank of Portugal sought to standardize and clarify the information provided. This standardization allows bank customers to quickly and easily compare different loan offers, helping them make informed decisions.

FINE includes important information about Mortgage Life Insurance and Multi-Risk Insurance. Knowing how to analyze this information can make a difference in choosing the solutions that best fit your needs. Let’s now explore the two sections of this document that relate to insurance.

What should you keep in mind when reviewing the FINE to save on mortgage life insurance?

FINE provides a range of information. However, there are two key points to consider when analyzing insurance terms and conditions. They are:

FINE Item 4: Interest Rates and Other Costs

In this field, you will find information regarding the interest rates applied: Euribor, base spread, and contracted spread. Here, the following are also listed: Required insurance and the costs associated with them.

Required Insurance

These are the insurance policies required by the bank, such as Mortgage Life Insurance and Multi-Risk Insurance. Although they are required by the bank, these insurance policies can be purchased through providers other than the bank where you are applying for the mortgage.

This section provides the average annual cost of insurance policies, if purchased through the bank. This information allows for an easy comparison with the cost of insurance policies purchased from insurers outside the bank.

Base spread

This is the interest rate on the bank's profit set for the loan you are about to take out.

Contractual spread

This is the spread that will be applied if all the conditions for the interest rate discount are met; otherwise, the base spread is applied.

Euribor

The Euribor rate can be fixed or adjusted every 3, 6, or 12 months. If the interest rate rises, the amount of the mortgage payments will also increase.

This section of the FINE also indicates whether the spread rate is fixed or variable. To help you make an informed decision on this matter, we recommend that you review Table 6 on repayments.

Compare Table A with Table B and consider whether you would be able to afford the monthly payment if the Euribor reached the levels shown in Table B:

• If so, a variable-rate loan is the best option for paying off the loan more quickly.
• Otherwise, choose a bank that offers a fixed rate for the entire term of the loan, even if that means a higher monthly payment at first.

FINE Item 8: Additional Obligations

At this point, it is possible to review the bonds that secure the agreed-upon spread. This information can be found under “Optional Related Sales” in the section on Products and Services Related to the Loan.

Optional cross-sells

Here is a list of the products you must have in order to maintain your bonuses. Some examples of these products include: direct deposit of your paycheck and other payments, taking out Mortgage Life Insurance and Multi-Risk Insurance, retirement savings plans (PPRs), and credit cards, among others. Typically, banks offer a selection of products, and you can choose, for example, three of them.

At this point, **it is essential to determine whether it is worth purchasing the products required by the bank in order to get a more favorable spread.**

To find the answer to this question, we recommend that you:

• Calculate the total cost of the products required to qualify for the rebate;
• Check the account maintenance and credit card fees to include them in your calculations;
• Check to see if there is another bank offering the same spread but with fewer product requirements;
• Request a quote for Mortgage Life Insurance and Multi-Risk Insurance to entities outside the bank, as these products incur the highest costs, and compare this with the amount described in Item 4, under “Required Insurance.”.

Why should you compare quotes for life insurance, mortgage insurance, and comprehensive insurance?

A mortgage will be with you for most of your life, so your decisions need to be well-considered and informed.

Evaluating the simulations and comparing offers from different banks allows you to make a more informed and conscious decision, which will lead to better choices. This will make it easier to negotiate the terms that best meet your needs and secure an offer with minimal obligations and associated costs.

Reducing expenses is about much more than just securing a low contracted spread; it also involves the amount you pay for required insurance.
Now that you know how to analyze the FINE, do the math and see how much you’ll pay for Mortgage Life Insurance and Multi-Risk Insurance. Take this opportunity to request a quote from us for these insurance policies and compare them with the rates offered by the bank—with no obligation and at no cost.

Learn how EXS simulates your insurance policies

With over 25 years of experience in the insurance market, EXS conducts a thorough analysis of existing options for every quote request in order to find the most advantageous solution.

This is a free mediation service in which EXS acts impartially and independently, ensuring that your interests are protected.

When you request a quote, our team will contact you to gather the necessary information so that the proposal we provide meets your actual needs.

To help you save on your life, mortgage, and multi-risk insurance, we've compared offers from the 26 largest insurance companies in the country.

We compared the offers from the 26 largest insurance companies in the country so you can save on life insurance, mortgage insurance, and multi-risk insurance.

Our proposal offers the most beneficial solution, with the broadest coverage.