Under normal circumstances, there are two ways to repay part of the mortgage in advance. One is to keep the monthly repayment amount unchanged but shorten the repayment period, and the other is to keep the repayment period unchanged but reduce the monthly repayment amount. Lenders can also choose according to their actual situation.
When repaying the mortgage in advance, the lender needs to apply to the bank first, and then the bank will review the lender's application. In addition, the lender needs to know whether there will be liquidated damages for repaying the mortgage in advance, which will also be agreed in the loan contract.
When repaying the mortgage, the lender needs to pay attention to the repayment time. There is generally no grace period for mortgage repayment. If the lender is overdue for many times, the lending bank even has the right to terminate the loan contract in advance.
Will the interest on mortgage prepayment be less?
The interest on prepayment of mortgage will definitely be reduced. There are three main ways to repay the loan in advance:
1. Pay all the money in advance:
If the mortgage is paid off in advance, the interest will only be calculated until the day when the mortgage is paid off, and then the interest will no longer be calculated, and the interest will naturally decrease. However, there is great pressure to pay off all in advance.
2. Partial prepayment, with the loan term unchanged:
Partial repayment in advance can reduce the monthly repayment amount and interest and reduce the repayment burden without changing the loan term.
3. Partial repayment in advance to shorten the loan period;
If you repay part of the loan in advance and shorten the loan term, the interest will be reduced, and it will be much less than the second method, but the monthly repayment amount will remain unchanged.
Everyone needs to pay attention to one thing, because most mortgages are repaid with equal principal and interest, so the interest is basically repaid in the early stage of repayment, and then the proportion of principal will become larger and larger as the interest is slowly repaid. Therefore, if you repay the loan in advance in the later period of repayment, even if you can reduce some interest, it will not be much, because the interest will soon be finished.