Is it cost-effective to repay the mortgage in advance? Many investors have this question. Now let's analyze what kind of situation it is good to repay the mortgage in advance and what kind of situation it is not necessary to repay the loan in advance.
Paying off provident fund loans in advance saves money
Analysts suggest that if there is no better way to invest and there is more spare money on hand, you can choose to prepay. After all, prepayment can pay a lot of interest less than the original loan plan.
There is also a very important point, compared with commercial loans in advance repayment, there is no fee or liquidated damages in advance repayment of provident fund, which is equivalent to the extra savings of a portion of expenses.
However, it should be noted that most provident fund loans or commercial loans will choose the repayment method of equal principal and interest. Generally speaking, interest is mostly paid in the early stage of repayment, so prepayment is the most appropriate in the first few years of the loan.
If it is already in the later stage of repayment, it is not suitable to repay the loan in advance. On the one hand, the current provident fund interest rate is only 3.25% and the commercial loan interest rate is 4.9%, which are already very low levels. On the other hand, most of the repayment in the later stage is the principal, so it is not suitable to repay the loan in advance.
It is not recommended to repay the loan in advance after more than 10 years of repayment
If there was a large mortgage interest rate discount five years ago, such as 8.5% or even 7%, it is not recommended to repay the loan in advance. After all, both the provident fund loan interest rate and the benchmark interest rate of bank lending have been at a low level. It is obviously inappropriate to repay the loan before raising such a low interest rate. However, if there were no interest rate concessions at that time, it would be possible to repay the loan in advance as long as we combined our own economic conditions.
If the loan has been repaid for 10 or 15 years, it is not recommended to repay the loan in advance. The longest mortgage life now is 30 years, and ordinary people often do not choose such a long life. That is to say, if the loan has been repaid for more than 10 years, it is likely to have come to the middle and late stage of loan repayment, and most of the late repayment is the principal, so it is not suitable to repay the loan in advance.
Banks may tighten housing loans during the year
From the housing loan data, in the first seven months of 2016, the average interest rate of the country's first housing loan was in a state of continuous decline, and the momentum of continuous decline was relieved in August.
On the one hand, due to the overheated property market in the working year, many banks overdraw the annual mortgage amount too quickly. At the same time, in order to prevent risks, many banks have made strategies to tighten mortgage; On the other hand, some key cities have launched the latest purchase and loan restriction policies and made corresponding norms for the mortgage market. For example, Shanghai has made unified provisions on the first mortgage interest rate in the city, and can only give a discount of 10% of the benchmark interest rate. Judging from past market experience, the closer to the end of the year, the more strict the bank's approval of housing loans is. Therefore, in the next period of 2016, the tightening of housing loans by banks is likely to become a probability event.
If it is for the purpose of investment, it will face a certain degree of investment risk whether buying financial management or investing in a house. However, for real estate alone, buying a house is undoubtedly the best means of investment, which is of great benefit to the preservation and appreciation of assets. However, the problem is that investment in real estate needs to consider clearly where to invest and what kind of real estate to invest in.
If there are 200000, the housing loan has not been paid off, and the provident fund is useless, is it cost-effective to transfer the provident fund to commercial loan or to keep and sell the second suite?
Experts said that if it is a business to public transfer, it depends on the specific provisions of the local provident fund center. Generally speaking, if the housing provident fund paying employee families who have one set of housing and have settled the housing provident fund loan, they will apply for the housing provident fund loan again to buy ordinary self occupied housing in order to improve their living conditions, and the down payment ratio will be increased accordingly, The loan interest rate is 1.1 times of the benchmark interest rate of individual housing provident fund loan.