Financial guidelines for rental deposits and loan amortization in Brazil

In Brazil, rental security deposits (caução) are subject to specific legal regulations under the Tenant Law. When provided in cash, the deposit is capped at the equivalent of three months' rent and must be placed in a savings account. Upon the termination of the lease and the return of keys, the landlord is required to return the amount along with any accumulated interest. Landlords may only deduct amounts for proven debts, such as unpaid rent or specific damages, but cannot charge for normal wear and tear.

Regarding financing, extra amortization allows debtors to reduce their total debt by paying more than the scheduled installment. Borrowers typically face a choice between two methods: reducing the remaining term of the contract or decreasing the monthly installment amount. Reducing the term generally results in a lower total cost of credit because it minimizes the period during which interest is applied, whereas reducing the installment amount focuses on improving monthly cash flow while maintaining the original contract duration.