Repaying the mortgage loan in advance can reduce the interest. Whether you choose to pay off the mortgage in advance in a lump sum or choose to repay part of the mortgage in advance, the interest on the mortgage loan can be reduced accordingly.

If you choose to pay off the loan in advance in one lump sum, the interest will only be calculated until the day of the early repayment.

If you choose to repay part of the mortgage in advance, after the early repayment, subsequent interest will no longer be calculated based on the total loan amount, but will be recalculated based on the remaining loan principal.

Precautions for early repayment of mortgage loans

1. Application time

Most banks do not allow borrowers to repay early at will. According to regulations, if the borrower To repay early, you need to apply after at least one year of repayment. And you can only apply once a year, so you need to call the bank in advance to negotiate.

To repay a mortgage in advance, it is best to do it in the early stages of repayment, because whether it is a mortgage that adopts the equal principal and interest repayment method, or a mortgage that adopts the equal principal repayment method, when the time of repayment comes, In the later period, there will be basically no interest left. At that time, early repayment will not reduce the interest much, so it is not cost-effective.

2. Repayment amount

No matter whether the borrower chooses to repay all the mortgage or repay part of the mortgage in advance, the bank stipulates that the minimum repayment amount is 10,000, and the repayment amount must be It must be an integral multiple of ten thousand.

3. Liquidated damages

Premature loan repayment is essentially a breach of contract, so many banks will charge a certain amount of liquidated damages. Each charging standard may be different. Generally, it is charged according to a certain proportion of the early repayment amount (usually between 1 and 3). Some will directly charge a few more months of interest as liquidated damages.

4. Loan interest rate

If part of the loan is repaid in advance, after the principal is repaid, the loan interest will need to be recalculated for the remaining loan. Some banks will require interest rates to be recalculated considering the income issue, but this is not very cost-effective for home buyers.

5. Combination loan

If the borrower's loan is a combination loan, according to regulations, when the combination loan is repaid in advance, only one of them cannot be repaid, and a certain proportion must be maintained.

6. Precautions for partial repayment

After partial repayment in advance, customers can choose to reduce the monthly payment as needed, keep the repayment period unchanged, or choose to shorten the repayment. Period, keep the monthly payment unchanged. If you choose to shorten the monthly payment period, you can reduce the monthly repayment pressure; if you choose to shorten the repayment period, you can pay off the debt earlier.