Like matching principal and interest, the monthly repayment amount remains unchanged throughout the repayment period, and the repayment is very stable, which is more suitable for lenders with relatively stable economic income.
The average capital is to divide the total amount of loans into equal parts, and repay the same amount of principal and interest generated by the remaining loans in that month every month. Repayment in advance is large, which will be more suitable for lenders who have a certain economic foundation and can bear heavy repayment pressure in the early stage.
It should be noted that under the same conditions, the interest charged by mortgage with average capital is lower than that charged by mortgage with equal principal and interest. Because of this, many lenders prefer to choose average capital to pay less. Banks are more keen to recommend equal principal and interest, after all, the income will be more.
In terms of average capital, due to the large investment in early repayment, the requirements for the lender's economic income level will be more stringent. In short, lenders can make choices according to their own needs and repayment ability.