Once you buy a house, you can supply it every day. Mortgage has now become a mountain for many people.
Therefore, in the matter of buying a house by loan, once some people have some spare money, they will choose to repay the loan in advance and want to get rid of the debt life for more than ten or even decades as soon as possible. Paying off the mortgage in advance can't you pay a lot less interest? If you have money, you should pay in advance.
However, some people say that it is best not to repay in advance and make good use of idle funds. So how should we choose? If you are also a "house slave" who is considering whether to pay in advance, you may wish to consider the following directions as mentioned by the minibus.
Can your return on investment outperform the mortgage?
At present, the interest rate of commercial loans over five years is 4.9%, and the provident fund loans are 3.25%. If you buy a house with a loan a few years ago, it is still very cost-effective to get the preferential loan interest rate of 15%, 20% or even 30% from the bank. If it is a second-home mortgage, it will rise 10% on the original benchmark interest rate.
Therefore, if you have money and can't find a higher investment method than your mortgage interest rate, you can consider repaying the mortgage.
But if the interest rate of your investment in wealth management products can outperform the loan interest rate, you can earn a spread. It is better to get extra income with low-cost loans without paying the mortgage first.
For example, if you use a provident fund loan, the loan interest rate is 3.25%. If you don't repay the mortgage first, but invest your money in wealth management products, such as bank wealth management products, the average expected rate of return now is around 4.9%;
Or brokerage wealth management products, the yield of 30-day term is around 5%, which can outperform your mortgage interest rate. If your mortgage interest rate is still discounted, it is even more uneconomical to repay the loan in advance, because after repaying the loan, you will not enjoy the original low interest rate discount.
Do you need a loan in the future?
When we say money flows, we call it money. When deciding whether to prepay, we need to consider the liquidity of funds and longer-term interests.
Today, it is not easy for private enterprises to borrow money, and low-interest mortgage can be said to be an excellent financing means. The increase of liquidity funds will undoubtedly make the possibility of wealth growth greater.
For example, the minibus finally saved a sum of 500 thousand after hard work, and then used this 500 thousand to pay off the mortgage in advance in order to avoid the debt of the house slave.
But unexpectedly, I met a good opportunity to start a business, and I needed 400,000 yuan, and the 500,000 yuan I could have held in my hand had already repaid the loan in advance.
What should I do at this time? Maybe the minibus will think of borrowing money from the bank again. When the bank asked, do you want to start a business with a loan? Approval is too risky for me.
Even if banks are willing to lend money to minibuses, the loan interest rate is higher than the mortgage interest rate, and the loan period cannot be extended to 20 or 30 years like mortgage, so that the repayment pressure of minibuses will be great and the capital flow will be stretched.
In the end, it is very likely that the minibus missed this entrepreneurial project and missed the opportunity to change its life.
However, it is not completely impossible. If your personal credit is good, you can still get loans through some mainstream online lending platforms, such as spending money, borrowing by ants, and micro-lending. , the maximum loan is 300,000. A friend of the minibus successfully obtained a credit line of 6.5438+0.8 million in money some time ago, which solved the urgent need.
How much did you pay off the mortgage?
As we know, there are two repayment methods of mortgage, namely "matching principal and interest" and "average capital". What kind of repayment method we choose and how much we repay will also have an impact on whether we should repay the loan in advance, because the main purpose we consider is to pay less interest.
The equal principal and interest repayment method is to add up the total principal and interest of the mortgage loan and then share it equally every month, that is to say, the total principal and interest you repay every month is fixed. Among them, the monthly loan interest is calculated according to the remaining loan principal at the beginning of the month and settled monthly.
Average capital's repayment method is to share the total loan cost equally, that is, the principal you repay every month is fixed, and then calculate the repayment interest according to the remaining principal. Therefore, the later this repayment method is, the less interest will be generated.
Let's directly use a picture to see the difference between these two repayment methods (loan 654.38+0 million to buy a house and pay it off in 20 years):
For the repayment of equal principal and interest, if your repayment has passed 50%, it is meaningless to repay in advance, because most of the interest has been paid back to the bank in advance in half of the loan cycle;
If the repayment period of average capital exceeds 1/3, nearly half of the interest has been paid, and more is the later principal. In fact, the interest level has little effect on the repayment amount, so there is no need to repay in advance at this time.
For these two repayment methods, if you are still in the first few years of repayment, your mortgage interest rate is relatively not so cost-effective, and you have a lot of spare money and don't want to invest, then it is ok to repay in advance.
Generally speaking, whether to repay the mortgage in advance, everyone can have their own choice. Some people always feel that it is not easy to take out a mortgage, which is really unbearable. Anyway, it is understandable that they should pay off as long as they have money.
But if he is a rational financial manager, the pressure of benign debt is actually tolerable, and he doesn't need to change to this temporary relaxation, because he knows that in the long run, if he can make better use of the funds in his hand, he can create greater value.