What are the mortgage repayment methods?
I. Equal principal and interest method
One of the most important characteristics of the equal principal and interest method is that the monthly repayment amount is the same. In essence, the proportion of principal increases month by month, the proportion of interest decreases month by month, and the number of monthly repayments remains unchanged. That is to say, in the "principal and interest" distribution ratio of monthly payment, the proportion of interest repaid in the first half is large, and the proportion of principal is small. After the repayment period is over half, it gradually turns into a small proportion of principal and interest. The calculation formula is as follows:
Monthly repayment amount = [principal x monthly interest rate x( 1+ monthly interest rate) loan months ]/[( 1+ monthly interest rate) repayment months-1]
Monthly interest = residual principal x monthly loan interest rate
Total repayment interest = loan amount * loan months * monthly interest rate *( 1+ monthly interest rate) loan months /( 1+ monthly interest rate) repayment months-1- loan amount.
Total repayment amount = repayment months * loan amount * monthly interest rate *( 1+ monthly interest rate) loan months /( 1+ monthly interest rate) repayment months-1.
Note: In the method of matching principal and interest, banks generally charge interest on the remaining principal first and then on the principal, so the proportion of interest in monthly contributions will decrease with the decrease of principal, and the proportion of principal in monthly contributions will increase, but the total monthly contributions will remain unchanged.
Suitable people with equal principal and interest:
The monthly repayment amount of equal principal and interest is the same, so it is more suitable for families with normal consumption plans, especially young people. Moreover, with the promotion of age or position, income will increase and living standards will naturally rise; If this kind of person chooses the principal method, the early pressure will be very great.
Second, the law of average capital.
The biggest feature of the average capital method is that the monthly repayment amount is different, showing a state of decreasing month by month; It is to evenly distribute the loan principal according to the total number of repayment months, plus the interest of the remaining principal in the previous period, thus forming the monthly repayment amount, so the repayment amount of the average capital method is the largest in the first month, and then decreases month by month, and the less the more, the calculation formula is as follows:
Monthly principal and interest repayment amount = (principal/repayment months)+(principal-accumulated repaid principal) × monthly interest rate.
Monthly principal = total principal/repayment months
Monthly interest = (principal-accumulated principal repayment) × monthly interest rate
Total repayment interest = (repayment months+1)* loan amount * monthly interest rate /2.
Total repayment amount = (repayment months+1)* loan amount * monthly interest rate /2+ loan amount.
Note: In the average capital method, the amount of principal returned by a person every month is always the same, and the interest decreases with the decrease of the remaining principal, so the monthly repayment amount gradually decreases.
As can be seen from the above, under normal circumstances, the total interest paid by equal principal and interest is more than the average capital, and the longer the loan term, the greater the interest difference.
Appropriate population of average capital:
The average capital method is more suitable for lenders with strong repayment ability some time ago, because the repayment amount in the early stage is large, and then it decreases month by month. Of course, some older people are also more suitable for this way, because their income may decrease as they grow older or retire.