Home Equity: Using the Property You Already Own to Buy the Next One

Home equity — or Secured Property Loan (Crédito com Garantia de Imóvel, CGI), as it is called technically in Brazil — is a credit facility that transforms existing real estate assets into available capital without requiring the sale of the property. Anyone who already owns a fully paid apartment or one with an active mortgage can use that asset as collateral to obtain credit for any purpose: down payment on another property, renovations, working capital, or reinvestment.

The logic is straightforward: the property already exists, already has a verifiable market value, and is already registered in the property title registry. The bank uses that asset as collateral for a new credit operation. Because the risk for the bank is lower than with unsecured personal loans, the interest rate drops significantly.

What most property owners don’t realize is that this mechanism is available even for properties with financing still outstanding — the bank subtracts the current loan balance and releases credit against what remains. The strategy does not require a property that is 100% paid off.

What is home equity — and what it’s called in Brazil (CGI)

Home equity in Brazil is formally operated as Secured Property Loan (Crédito com Garantia de Imóvel, CGI), also called real estate financing. The name varies by bank — Caixa Econômica Federal, Itaú, Bradesco, and Santander use their own denominations — but the structure is the same.

The fundamental difference compared to conventional real estate financing: in conventional financing, the credit serves specifically to purchase a property. In CGI, the credit is for any purpose — the property owner decides what to do with the money without needing to justify it to the bank.

The property is pledged to the bank for the entire duration of the contract. Fiduciary pledge is the legal mechanism (Law 9.514/1997) that transfers formal ownership to the bank as collateral, while the borrower maintains possession and use of the property. If payment occurs normally until the end of the contract, ownership reverts to the borrower automatically with no additional paperwork.

How the bank calculates how much it can lend against your property

The bank determines available credit by LTV (loan-to-value): the proportion between the credit amount and the appraised value of the property pledged as collateral.

The maximum LTV practiced in Brazil for CGI is 60% of appraised value. For a property appraised at R$ 600,000, the maximum possible credit is R$ 360,000.

If the property still has active financing, the outstanding loan balance is deducted:

The process begins with a formal appraisal of the property by an appraiser credentialed by the bank. The bank does not use a sale price declared by the property owner — it uses the value determined by technical appraisal. For this reason, a property in a high-demand area with regular documentation and good condition tends to have an appraisal value closer to actual market value.

Home equity interest rate: why it’s cheaper than personal loans

CGI rates range from 0.79% to 1.35% per month — much lower than personal loans (3% to 8% per month) and revolving credit card rates (which can exceed 15% per month). Terms reach 240 months (20 years).

The reason is simple: the bank has real collateral. If the borrower fails to pay, the bank can execute the fiduciary pledge and take back the property. This reduced risk translates into a lower rate for the borrower.

Practical comparison for a R$ 200,000 credit with 10-year term:

Even if the CGI rate of 1.1% per month seems high in absolute terms (equivalent to ~14% per year), it is one-third or less the cost of unsecured credit options. For amounts above R$ 100,000, this difference means tens of thousands of reais over the life of the contract.

In practice, what I see is that CGI is one of the most underutilized tools by real estate property owners in Brazil — most don’t even know it exists under these conditions.

Four smart uses of home equity in real estate strategy

Secured property loans have flexible use, but the most effective uses within a real estate wealth-building strategy are four:

• Down payment for the next property: CGI releases capital without requiring the sale of your current property, allowing the owner to keep the first asset — which continues generating rental income or appreciating — while financing the acquisition of a second one
• Renovation to increase rental value: a renovation financed with CGI can raise monthly rent and improve property profitability permanently
• Diversification into other assets: some investors use the released capital for financial investments with returns exceeding the CGI cost — a strategy requiring discipline and risk analysis
• Working capital for the owner’s business: for someone who owns a property and operates a business, CGI can be cheaper than unsecured business credit lines with real collateral

Regarding refinancing through appreciation — when the property has risen in value since purchase — the strategy is similar but based on different logic: the bank reappraises the property, equity increases, and new credit is released based on the updated value.

Risks: what happens if you don’t pay

The central risk of CGI is clear and needs to be stated plainly: the bank can execute the property pledged as collateral if the borrower stops paying.

The fiduciary pledge (Law 9.514/1997) is an efficient execution mechanism. Unlike mortgages, which required lengthy court proceedings, execution by fiduciary pledge can occur within 90 days of confirmed default, via extrajudicial process. The bank notifies the borrower, who has time to cure the default (pay the arrears), and if they don’t, the property goes to auction.

The family’s most valuable asset — the property — remains at risk while the contract is active. This is the fundamental difference between CGI and personal loans: with personal loans, the defaulter has their name listed; with CGI, the defaulter can lose the property.

Before entering into this type of contract, evaluate:

• Your ability to pay over the maximum 20-year term
• The expected return on the use of released capital — it must exceed the CGI cost
• The liquidity of invested capital in case you need to sell it to repay the credit

For those who use CGI with discipline and a clear purpose for the capital, the facility is one of the most efficient real estate leverage tools on the market. To understand how this leverage works together with rental strategies, also see the article on real estate leverage.

Frequently Asked Questions — Home Equity in Brazil

Do I need to have the property completely paid off to get a home equity loan?

No. CGI works even with active financing. The bank subtracts the outstanding loan balance from the maximum credit (calculated as 60% of appraised value). If the resulting equity is positive and sufficient for the operation you intend, CGI can be contracted.

Does CGI affect the real estate financing I already have?

Not necessarily. In many cases, CGI is contracted as an additional operation without altering the original financing. The two contracts coexist, with separate payments. The property remains linked to the CGI bank during the contract — for this reason, it’s important to verify if the bank of the original financing allows the operation.

Which bank offers the best CGI terms?

Terms vary depending on the customer profile, property value, and bank. Caixa Econômica Federal, Itaú, Bradesco, Santander, and Inter operate CGI with different conditions. Comparing the CETCETVer tudo → (total effective cost) — not just the nominal rate — is the correct method of selection.

Can the FGTS be used for CGI?

No. FGTS is tied to the acquisition or construction of your own residential property. CGI has flexible use and does not fit within FGTS rules. Consult how to use FGTS for your property purchase if that’s your question.

How long does it take to contract CGI?

The process includes property appraisal, credit analysis, and registry office registration. On average, it takes 30 to 60 days from application to credit release, depending on the bank and the completeness of documentation.

The property you already own can finance the next one — evaluate the potential with Regente

Secured property loans (CGI) are one of the most underutilized tools by real estate property owners in Brazil. Most don’t know they can extract capital from a property without selling it — and without creating a risk they can’t manage.

To use CGI intelligently, the first step is knowing the real appraised value of your property today, not the price you paid at purchase. Properties in Florianópolis have appreciated significantly over the last decade — the available equity could be larger than you imagine.

Regente Imóveis evaluates the credit potential of your property and explains how to integrate CGI into your wealth-building strategy. [Evaluate your property’s credit potential with Regente](/fale-conosco).

[IMAGES — via Unsplash]

• Featured image:

Suggested query: “real estate investment property equity keys”

Alt text: Property key on financial documents representing home equity and CGI in Brazil

File name: home-equity-imovel-como-funciona.jpg

[ABBREVIATED VERSION FOR DISTRIBUTION]

• Instagram caption (up to 300 chars): Your property can generate credit without you selling. Home equity (CGI) releases up to 60% of your property value with rates from 0.79% to 1.35% per month — well below personal loans. Learn how to use this asset as leverage in the link in bio.
• Hook for Reels: “You own a property and need capital? You might not need to sell — and you probably didn’t know it was possible.”
• LinkedIn excerpt: Secured Property Loan (CGI) allows you to extract capital from real estate assets without sale, with rates between 0.79% and 1.35% per month and terms up to 20 years. For a property appraised at R$ 600,000 with an outstanding loan balance of R$ 150,000, available equity reaches R$ 210,000. This tool is underutilized because most property owners don’t know it exists under these conditions.