Glossary
Plain definitions of the main financial terms used across Calculadora Capital’s calculators and guides. Each term links to the page that explains it in detail.
Financial terms A to Z
- Amortisation
Paying down the outstanding capital of a loan. Early amortisation means repaying part, or all, of it ahead of schedule.
- APRC (TAEG)
The Annual Percentage Rate of Charge. It includes interest, fees, insurance and other costs, so it reflects a loan’s real cost better than the nominal rate.
- Beneficiary
The person who receives the insurer payment when the event occurs. On a life policy tied to a loan it is frequently the bank itself.
- Capital gains
The profit from selling an asset, such as property or shares, for more than it cost. It may be subject to tax.
- Compound interest
Interest calculated on the initial capital and also on the interest already accumulated. It makes money grow faster over time.
- Debt-to-income ratio
The share of monthly income that goes to loan repayments. Banks use it to assess repayment capacity.
- Deductible
The share of a loss borne by the insured. It may be subtracted from every claim, or act as a threshold, in which case the insurer pays the loss in full above it.
- Disability percentage
The percentage expressing the loss of capacity left by an accident, certified by medical assessment against a table. It multiplies the disability capital.
- Early retirement
Retiring before the normal pension age, usually with a penalty applied to the amount.
- Euribor
The benchmark interest rate of the European interbank market. It indexes most variable-rate mortgages in Portugal.
- Holiday and Christmas pay
Two extra payments employees are entitled to each year, on top of the 12 months of salary.
- IMI (municipal property tax)
The municipal property tax, paid yearly by owners, based on the taxable asset value and the municipality’s rate.
- IMT (property transfer tax)
The municipal property transfer tax, paid by the buyer when purchasing a property.
- Inflation
The general rise in prices over time, which reduces the purchasing power of money.
- Insurance claim event
The event that triggers the policy covers. Reporting it to the insurer within the period the contract sets is what opens the claims process.
- Insurance policy
The document that embodies the insurance contract. It brings together the General Conditions, which set the rules and exclusions, the Special Conditions for optional covers, and the Particular Conditions carrying your own figures.
- Insured person
The person whose risk the contract covers. In many personal lines this is a separate role from the policyholder, who pays, and the beneficiary, who receives.
- IRS (personal income tax)
Portugal’s personal income tax. It is charged on annual income through progressive brackets.
- IRS Jovem
A scheme that reduces income tax for young workers during their first years in the workforce.
- IUC (vehicle tax)
The annual vehicle circulation tax in Portugal.
- Nominal annual rate (TAN)
A loan’s annual interest rate, excluding fees and other charges. On a variable-rate loan it is Euribor plus the spread.
- Old-age pension
The pension paid by Social Security to those who reach retirement age and meet the minimum contribution period.
- Policyholder
The person who enters into the contract with the insurer and owes the premium. They may differ from the insured person and from the beneficiary.
- Retirement savings plan (PPR)
A long-term, retirement-oriented savings product with associated tax benefits.
- Savings certificates
A low-risk savings product issued by the Portuguese State for individuals.
- Self-employed (recibos verdes)
The tax regime for self-employed workers in Portugal, who issue electronic receipts for the services they provide.
- Simple interest
Interest calculated only on the initial capital, with no interest earned on interest.
- Spread
The margin a bank adds on top of Euribor to set a mortgage’s interest rate.
- Sum insured
The maximum the insurer undertakes to pay. It works as a ceiling: a loss above it is not fully indemnified.
- Taxable asset value (VPT)
The value the tax authority assigns to a property. It is the basis for calculating IMI and IMT.
- Term deposit
A bank deposit with a set interest rate and a fixed term.
- VAT (IVA)
Value Added Tax. A consumption tax included in the price of most goods and services.
- Waiting period
The time that must pass before a cover takes effect. A loss occurring within the waiting period is not paid under that cover.
These definitions are educational and do not constitute financial advice.
The public system that funds pensions and benefits through contributions on salaries.