This cannot be said directly whether it is more cost-effective to pay equal amounts of principal or equal amounts of principal and interest. It requires detailed analysis of the specific situation. There are mainly the following reference aspects:

1. Look at the loan period

If you may repay the loan early within a few years, choose an equal amount of principal. If you will not repay the loan in advance for more than 10 years, choose an equal amount of principal and interest.

Equal amounts of principal are also called equal amounts of principal and interest. With the repayment method, the total interest on the repayment of equal amounts of principal is less than the repayment method of equal amounts of principal and interest. This is because the repayment method of equal amounts of principal is that the repayment amount gradually decreases, that is to say, every month The repayment amount is different. The total loan amount is divided evenly according to the number of repayment months, and the interest on the remaining principal of the last repayment is also calculated to form the monthly repayment amount. So if you plan to repay the loan early, it is more cost-effective to choose equal amounts of principal than equal amounts of principal and interest

Bank insiders say this: "If the loan period is shorter, the interest that needs to be repaid will be less. The longer your loan is, the more interest you need to repay.

2. Look at the total interest: equal principal and interest > equal principal

If the loan terms are the same. Under the conditions, whether it is more economical to pay equal principal and interest, or equal principal and interest, a friend from the bank gave me an example: For example, if we take a 1 million mortgage (20-year period as an example), the total interest paid in equal principal and interest It is 570,000, and the total interest paid on the equal principal amount is 490,000.

It can be seen from the calculation that the interest paid on the equal principal amount is less, and the total interest on the equal principal amount is more cost-effective.

3. Look at the cash flow

If the cash flow is sufficient in the short term, you can choose equal principal and interest. This is a more-first-lower model. If the cash flow is insufficient in the near future, you can choose equal principal and interest. The initial repayment of the principal is high and stressful, so if the recent income is unstable, it is not recommended for office workers to choose an equal amount of principal, nor is it recommended to repay in advance. After all, the monthly repayment will reduce the quality of life, and nowadays bank loan interest is relatively In fact, it is not cost-effective to transfer money in advance; but for those who are financially wealthy and plan to end this "house slave" life early, it is more cost-effective to choose an equal amount of principal.

4. Look at the expected return and loan interest rate.

If you choose a new house with equal principal and interest, it will definitely be replaced by a house in a school district. When the interest rate is low, choose equal principal and interest. Many friends from the bank said bluntly. People choose the wrong "free" money. With the rapid development of the economy, the standard of living is getting higher and higher, and the purchasing power of RMB is relatively reduced. If conditions permit or there is demand, you only need to choose the loan period as long as possible

5. Check the qualifications for the first home

The first bank staff reminded: It is not easy to qualify for the first home. Try to use 70% of the maximum loan period. It is recommended to choose equal principal and interest for the first new home so that you can afford it. Less repayment pressure

Finally, the bank staff reminds us clearly about the loan principle: the shorter the loan period, the less the interest will be. On the contrary, the longer the loan period, the more interest will be paid!

To sum up, which one is more cost-effective depends on your financial situation. It does not mean that the longer the loan period, the better, nor does it mean that the shorter the loan period, the more cost-effective it is. Choosing the one that suits you is the most important