Multiple contracts: the cases of SIMC and SALC

Clovis de Faro and Gerson Lachtermacher

No 850, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: In 1984 the Brazilian System of Housing Financing (SFH) introduced the Mixed System of Amortization with Increasing Installments (SIMC), and in 1988 Jorge Oscar de Mello Flores, then a member of the BNH Council, presented the Linearly Increasing Amortization System – SALC as a new way to increment house financing commercialization. In this article we analyze both methods of amortization and compare them with the multiple scheme system, introduced by De Losso et al. (2013), to determine, in each case, the best option for the financing institution. Additionally, an alternative to SIMC is also analyzed. Given the choice, the borrower should request the financing institution to implement it.

Date: 2026-04-09
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