Anyone buying a lot usually doesn't finance it through a bank the way they would a finished house. The most common model is direct financing with the developer itself, with the outstanding balance adjusted monthly by IGPM instead of a fixed bank interest rate.
What IGPM is and who calculates it
IGPM (General Market Price Index) is calculated monthly by IBRE, the Brazilian Institute of Economics at FGV (Fundação Getulio Vargas). It's a weighted average of three other FGV indices: IPA (wholesale price index, 60% weight), IPC (consumer price index, 30% weight) and INCC (construction cost index, 10% weight). Price data is collected from the 21st of the previous month through the 20th of the reference month.
Why lots are usually financed directly by the developer
Financing the standalone purchase of land through the traditional banking system is more restricted than financing a finished house. Banks usually require the land to already be classified as an urban lot, with basic infrastructure (power grid, sanitation), to consider it for financing under the Housing Finance System (SFH), and even then the terms vary from bank to bank. That's why most subdivision developers offer direct financing, in installments with the company itself, outside the banking system, with the balance adjusted by an index (usually IGPM) instead of a bank interest rate.
Can you finance a lot through a bank, using FGTS?
In some cases, yes, but it's not the rule: FGTS can be used to finance construction on land you already own, or to finance the land purchase together with construction, as long as the land is classified as an urban lot. Using FGTS for the standalone purchase of a lot within a subdivision still being developed, with no construction involved, usually isn't covered. Worth confirming the specific conditions directly with the bank before ruling this out.
IGPM, INCC or TR: why the index matters
Not every adjustment index fits every type of contract equally well. The right index depends on what's being financed and by whom.
INCC: built for a construction in progress, not a lot sitting idle
INCC (National Construction Cost Index), also calculated by FGV, adjusts installments for properties still being built or under construction, tracking the cost of materials and labor as the construction progresses. That makes sense for an apartment being built, because the debt is directly tied to the cost of that construction. A lot has no construction in progress being financed, so adjusting the installment by construction costs has no direct relationship to what's actually being paid for.
TR: a bank financing index, not a direct financing one
TR (Reference Rate) is calculated by Brazil's Central Bank from the Basic Financial Rate, and it's the index used to adjust bank financing under the Housing Finance System (SFH), funded by savings accounts. Since direct lot financing doesn't go through the banking system, TR simply doesn't apply to this type of contract.
Why IGPM is the standard index for direct lot financing
According to CRECI (the regional council of real estate brokers), IGPM is the index used to adjust installments specifically in direct financing with the developer, unlike TR (banking) or INCC (tied to construction in progress). Since it isn't tied to a specific construction cost or to the banking system, IGPM works as a general market price index, suited to adjusting a debt paid in installments outside the financial system, whether that's an already-delivered unit originally sold off-plan or a lot that never had any construction tied to it.
How the IGPM adjustment works in practice
The outstanding balance is adjusted every month by that month's IGPM variation (not by the 12-month accumulated value). This means that even paying installments on time, the remaining balance can go up in months with high IGPM, and go up only a little (or even drop, if the index is negative) in months with low IGPM.
A hypothetical example: the balance, month by month
To illustrate the mechanism (the numbers below are hypothetical, not a real forecast): imagine an outstanding balance of R$ 100,000 after that month's installment is paid. If that month's IGPM is 0.50%, the balance starts the following month at R$ 100,500 (R$ 100,000 × 1.005), before the next installment is deducted. If the following month's IGPM is 1.20%, the adjustment on the new balance is larger in absolute terms, even with the same percentage of the installment paid. That's why lot financing simulators usually show the balance moving month to month, instead of a fixed table like a loan with a pre-set interest rate.
IGPM vs. IPCA: why they aren't the same thing
IPCA (Broad Consumer Price Index) is calculated by IBGE and is the benchmark Brazil's Central Bank uses to set the Selic rate and the country's inflation target. It mainly measures price changes for the end consumer. IGPM, with 60% of its weight on wholesale prices (raw materials, inputs, the exchange rate), tends to be more volatile and can drift quite far from IPCA during certain periods.
Heads up: IGPM can rise faster than everyday inflation
Because IGPM tracks wholesale prices, it reacts more strongly to swings in the exchange rate and commodities than the inflation most people feel at the supermarket. That means that in years with a sharp rise in the dollar or in raw material prices, a balance adjusted by IGPM can grow much faster than the buyer's salary or income, even without any late payment. It's worth checking the index's history before signing a long-term contract with this kind of adjustment.
What to check before signing the contract
- Is the adjustment index really IGPM, or does the contract use a different one (INCC, IPCA, or a developer-specific index)?
- Is there any cap or protection mechanism against index spikes?
- Is the installment amount fixed in reais, or is it also recalculated with every balance adjustment?
- What's the total financing term, and what happens if a payment is late?
Quick comparison
| Index | Who calculates it | Used for | Why it's not ideal for a lot |
|---|---|---|---|
| IGPM | FGV (IBRE) | Direct financing with a developer, rent adjustment | It's the fitting index: not tied to construction or to banking |
| INCC | FGV | Installments for off-plan/under-construction properties | Tracks construction cost; a lot has no construction in progress |
| TR | Central Bank | Bank financing under the SFH (savings accounts) | Only applies to bank financing, not direct financing |
| IPCA | IBGE | Inflation target and Selic rate (Central Bank benchmark) | Measures consumer inflation, not the market convention for this kind of contract |
How it works at Riviera de Santa Cristina XIII
At Riviera de Santa Cristina XIII, financing is done directly with the developer, with the balance adjusted by IGPM, and commercial terms vary by location and lot size. See the lot map and available sectors, or check how to confirm a subdivision is legalized to understand the legal footing behind the contract.
Want to simulate the terms for the lot you have in mind? Reach our team through the contact form.
Frequently asked questions
What is IGPM?
It's the General Market Price Index, calculated monthly by FGV's IBRE, used to adjust rental contracts and direct property financing, including lots.
Is IGPM the same thing as interest?
No. IGPM adjusts the outstanding balance based on price changes in the economy; interest is an extra cost charged by the lender. Financing described as "no interest, just IGPM adjustment" means you're paying only the balance update, with no added bank interest cost.
Can you finance a lot through a bank, using FGTS?
In some cases, if the land is already classified as an urban lot with infrastructure, but FGTS usually doesn't cover the standalone purchase of a lot in a subdivision still being developed. Worth confirming directly with the bank.
Why not use INCC or TR to adjust lot financing?
INCC tracks the cost of a construction in progress, and a lot has no construction being financed. TR is the index for bank financing (SFH), and direct lot financing doesn't go through the banking system. IGPM, being a general market index, is the standard used in this kind of direct contract with a developer.
Why can the balance go up even when installments are paid on time?
Because the IGPM adjustment applies to the balance every month, regardless of the installment payment. In months with high IGPM, the adjusted balance can grow by more than the amount the installment paid down.
How does financing work at Riviera de Santa Cristina XIII?
It's done directly with the developer, with the balance adjusted by IGPM, and commercial terms vary by location and lot size.