Nowadays, many people are willing to buy houses through loans. According to relevant statistics, at present, there are nearly 400 million house slaves in China. So for the loan buyer, is it worthwhile to repay the loan in advance? How many years is a house loan the most cost-effective? In fact, it is the stupidest way to repay the house loan in advance.
1、 In fact, there are different opinions on whether to pay off the mortgage in advance
With the continuous increase of people's income, after a few years of buying a house, minus the monthly mortgage, living expenses and other expenses, many house slaves have accumulated a sum of money. Many people want to pay off their mortgage ahead of time after they have accumulated enough wealth, because they don't want to owe money to the bank, and they feel "debt free and light".
Whether the mortgage should be paid in advance
However, some of the house slaves felt that they didn't want to pay off the house loan in advance. Because the price is rising sharply, the interest rate of the US dollar is increasing, and the currency continues to depreciate, and the money is becoming less and less valuable. It's better to take this money to do other financial management or business, especially those who buy houses with provident fund loans, whose interest rate is very low, and they are more reluctant to pay off the house in advance.
In addition, because the interest rate of housing loan is now rising, and both commercial loans and provident fund loans are becoming more and more difficult, lending is very slow. So they think it's hard to pay off such a large amount of loans. It's better to pay off the mortgage slowly every month, not only to resist the current inflation, but also to do other financial management.
2、 How much do you know about mortgage?
In fact, different housing loans have different loan terms. Generally speaking, the longest period is no more than 30 years, and the most common ones are 10 years, 20 years, 25 years and 30 years.
In addition, there are different ways of repayment, including equal principal and interest repayment and equal principal repayment. Banks generally default to the repayment method of equal principal and interest, i.e. the repayment amount of each month is the same; while the repayment method of equal principal is that the monthly supply of housing loan is very high at the beginning, and then it decreases month by month. At the beginning, the repayment pressure is very large, and then it will slowly decrease.
Among the above repayment methods, although the interest of the equal principal repayment method will be much lower than that of the equal principal and interest repayment method, it is difficult for the general working class to bear it. Unless, of course, the salary is very high.
In addition, there are different types of housing loans, which can be divided into provident fund loans, commercial loans and mixed (Provident Fund + Commercial) loans. Now most banks don't allow mixed loans. They used to. In addition, the loan interest rate of provident fund is the lowest, which is 3.25%; the loan interest rate of the first set of commercial loans in China is now 5.51%. Specifically, you can consult the bank that the buyer applies for loan.
3、 So it's most reasonable to pay off the mortgage in a few years?
1. Buying houses with provident fund loans
Because the interest rate of provident fund loan is very low, and the proportion of inflation and currency depreciation is not the same every year, many bank personnel do not recommend that the buyer pay off the provident fund loan in advance. If you have a provident fund loan, you are not recommended to repay the loan in advance.
2. Buying a house with a commercial loan
But what about commercial loans? In fact, if commercial loans are repayments with the same amount of principal and interest, generally speaking, bank staff suggest that it is reasonable to pay off the loans within the first third of the total repayment time.
This is because almost all of the monthly housing loans repaid in the previous years by the way of repayment of equal principal and interest are paying interest, and the principal is very small. So the earlier you pay it in advance, the more money you save, the less interest you can pay.
For commercial loans, if the repayment method of equal principal is used, the bank staff suggest that it is reasonable to pay off the loan within the first half of the total loan time. Because the repayment method of equal principal is fixed, the proportion of principal is relatively large, and the interest is much less than the equal principal and interest.