Many homebuyers are very confused when they take out loans, and the banks do what they say. In fact, there are two ways to repay. Let's see which one is more suitable for you.

repayment method 1: matching principal and interest

this is a repayment method of fixed amount of expenditure. The sum of the principal and interest of the loan shall be repaid in equal monthly installments. The borrower repays the principal and interest of the loan in equal amount in each installment, and the repayment amount in each installment includes the principal to be repaid in the current period and the interest to be borne. During the whole repayment period, the repayment amount in each month is fixed.

advantages: the monthly repayment amount is fixed, which is convenient for the buyers to arrange capital expenditure.

Disadvantages: There are many interests in the overall expenditure, and the total interest expenditure is almost the highest among all repayment methods.

Suitable for the crowd: the current income is low and stable, especially for young people who just started working. Avoid people who have too much repayment pressure in the early stage, such as public officials with stable income.

repayment method 2: average capital

this repayment method is that the burden is moderate first and then light. The borrower will evenly share the loan amount in the whole repayment period and repay it monthly, and at the same time pay off the interest generated from the loan balance from the previous repayment date to this repayment period. The loan principal is shared equally throughout the repayment period, and the interest is calculated daily according to the balance of the loan principal. The monthly repayment amount is gradually decreasing, but the speed of repayment of the principal remains unchanged. Using this method, when the borrower starts to repay the loan, the monthly repayment amount is higher than the equal principal and interest repayment, and the burden will be greater. However, as the repayment time goes on, the repayment burden will be gradually reduced, and finally the total interest expenditure will be lower.

advantages: it can save a lot of interest expenses.

Disadvantages: the amount at the beginning of repayment is high.

Suitable for people: borrowers with higher income at present who want to reduce interest expenses later, such as retirees, senior executives of enterprises, gold collars, etc., or property buyers with better economic strength at present who are very likely to repay in advance.

(The above answer was published on November 3th, 216, and the current relevant housing purchase policy should be based on the actual situation)

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