Whether it is the United States or China, the composition of residential mortgage loans usually includes down payment ratio, interest rate and fees, repayment method, term, loan quantity, collateral, etc. The down payment ratio is not only equivalent to a down payment, but also reflects the borrower's ability, because it is difficult to believe that someone who does not even have the ability to make a down payment will have the ability to repay in the future. Interest rates and fees reflect the bank's cost of funds and services, or the bank's requirement for earnings. Due to the large amount of the loan, the repayment method is generally installment payment. Among the six elements, different regulations on down payment ratio, interest rate and fees, and repayment methods are the main differences between bank mortgage loans in different countries.
From a broad perspective, there is no difference between housing mortgage loans in China and the U.S. banking industry, but upon closer analysis, there are big differences: The biggest feature of housing consumer credit in the U.S. banking industry is also consumption The person can choose. The following takes the housing mortgage loan design of the banking industry in China and the United States as an example to analyze the similarities and differences in loan design between the two countries.
(1) Down payment ratio. The down payment ratio for residential mortgage loans in China is no less than 20%, which treats different consumers equally. There is no difference between us. This seems fair, but in fact there is a serious unfairness. Because people of different ages and income levels have different down payment abilities. Banks' loan product design should take this feature into consideration. In the United States, the down payment ratio ranges from 5% to 30% or more, and consumers can choose according to their own circumstances.
(2) Interest rates and fees. When consumers obtain housing mortgage loans, they will receive funds from the bank on the one hand, and non-financial services from the bank on the other, such as insurance agency, housing quality assessment, property rights transfer, etc. Because banks provide funds and related services in this process, banks charge interest and non-interest fees. At this point, there seems to be no difference between China and the United States.
(3) Repayment method. In China, housing mortgage loans adopt an equal monthly repayment method. This seemingly fair design actually does not take into account the specific differences of different borrowers. The repayment methods in the United States are flexible and optional. For example, borrowers can make equal monthly repayments, monthly incremental repayments, monthly decreasing repayments, etc.
From the above analysis, we can draw the following conclusion: The deposit and loan products in the United States are differentiated. First, the products of different banks are not exactly the same and are different from each other; second, the products of the same bank can be Meet consumers’ requirements for personalized choices.