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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
These definitions are educational and do not constitute financial advice.
The public system that funds pensions and benefits through contributions on salaries.