The question of whether it is worthwhile to pay off your mortgage loan early has always been the focus of debate. The current mainstream view is that it is "foolish" to pay off your mortgage loan early. The reason is that you can use these funds to invest, and you will get high returns after investing. If you pay off your mortgage early, you will lose a lot of good opportunities to invest and make money.
Of course, there are also opinions that if you pay off your mortgage in advance, you will be debt-free, and after paying off the mortgage, the house will truly belong to you. If you have been in debt for many years, , the house is never yours, but an asset belonging to the bank.
From the current point of view, whether they support early repayment of mortgage loans or not, these two opposing views have their own reasons. From the perspective of hoping that everyone will not repay their mortgage in advance, there are three major advantages to not repaying their mortgage in advance:
First, domestic inflation is relatively strong, the purchasing power of the RMB has been depreciating, and you owe The mortgage loan is also in the process of continuous depreciation, and the money will become less and less valuable in the future, so it will definitely be a disadvantage to pay off the bank mortgage in advance now.
Secondly, in China, the only large loans that ordinary people can get in their lifetime are housing loans. If you don't want to owe a mortgage, you're giving up this benefit. What's more, although the current bank mortgage interest rates have increased, they only have an interest rate of 5-6 at most. If you borrow money from underground banks and online loan companies, the interest rate will be 12-15. Therefore, the mortgage loan owed to the bank is quite cost-effective, so why rush to repay the mortgage loan?
Thirdly, if you have extra money in your hand and are burdened with a mortgage, you can invest it in areas with a higher return rate and earn more money. If you pay it off early With mortgages, there is no such opportunity to make money.
At the same time, domestic support for the idea of ??repaying mortgages early, they believe: First, the people who owe mortgages now are mainly ordinary people. Even if you have money in your hands, it is difficult to invest due to lack of investment ability. To obtain high investment returns, if you invest blindly, you may suffer heavy losses. Not only will you not be able to pay off your mortgage, but it will also cause a greater financial and psychological burden to you. Obviously, high-risk investment is definitely not something that ordinary people can play casually.
Second, if you happen to have a lot of money and can repay the mortgage in advance, repay the mortgage as soon as possible. In this way, you can be debt-free and the property rights of the house truly belong to you. If If you still owe a mortgage loan to the bank, the ownership of the house still belongs to the bank. More importantly, if you owe the bank a mortgage for thirty years, basically the interest you pay back to the bank after you pay off the mortgage is equivalent to being able to buy another property. Therefore, you have to pay interest on the mortgage loan you owe to the bank, but you do not owe the mortgage loan for free.
Third, although the central bank has lowered deposit interest rates and lowered reserve requirements for banks, bank mortgage interest rates are still rising. If you keep your money in the bank instead of paying off your mortgage, you won't be able to beat inflation. And if you use this money to repay the bank mortgage in advance, even if the mortgage interest rate rises in the future, it will have nothing to do with you, because you have already paid off the mortgage in advance.
One side hopes that you will not repay your mortgage in advance, and the other side believes that you should repay your mortgage in advance. Which view is more suitable for ordinary people? In this regard, some bank employees said, stop giving money to the bank foolishly. If you have a sum of funds that you will not use for the time being, you can consider paying off your mortgage in advance, which can save decades of mortgage payments. Interest is the wisest choice.
We agree with the idea of ??repaying mortgages in advance. There are two main considerations: First, we must not overestimate the ability of ordinary people to invest and manage money. Most people can make a fixed deposit and buy a The national debt is not bad. If you rashly invest in high-risk financial products, the probability of loss is very high. Don't think that your investment ability is comparable to Buffett and Soros. High-yield investments correspond to high risks.
Therefore, don’t listen to what some people say that if you pay off your mortgage early, you will lose the opportunity to make a lot of money. This is not true.
Furthermore, there is still room for rising mortgage interest rates in the future, and there is no room for lowering mortgage interest rates. The previous mortgage interest rates below 5 will no longer appear in the future. If the mortgage interest rate continues to rise in the future, and the home buyer agrees with the bank on a floating interest rate, it may cost several hundred yuan more in interest every month than before to repay the loan. If you can afford to repay the loan early, it is better to pay off the mortgage early. Don’t wait until mortgage interest rates continue to rise later to think about paying off your mortgage early.
Many people think that if you owe money to the bank, you should pay it back slowly. Paying off the mortgage loan early will be a disadvantage. If you have extra spare money, it is better to do investment and financial management. In fact, the money owed to the bank must be repaid with principal and interest, and the future trend of bank mortgage interest is that it will rise year by year. More importantly, if the money that is repaid in advance is used for investment and financial management, ordinary people's The investment ability is not strong. While blindly pursuing high returns, you will face higher investment risks. If a loss occurs, you will regret why you didn't pay off the mortgage loan in advance to make it more cost-effective.