Repay the loan normally or take the initiative to cut off the payment.

After the financial crisis, assets will depreciate as house prices fall. If the market house price is about to fall to near the purchase price, the asset will break even. If it continues to fall, asset losses will occur. At this time, rational home buyers will choose to cut off the mortgage payment, because it is more cost-effective to buy another house at the current market price than to continue to pay off the mortgage.

If this situation worsens, there will be a large-scale supply cutoff, which will have a huge negative impact on financial institutions. In order to survive and protect themselves, financial institutions will further sell mortgaged properties at low prices, and housing prices will fall further.

Extended information

When a financial crisis occurs, choosing a house or cash is actually not the best choice. This choice is of a “lesser of two evils” nature. In fact, when an economic crisis occurs, both houses and cash are at risk of depreciation. Generally speaking, when a socio-economic crisis occurs, all assets shrink.

It should be noted that since my country’s property taxes are not very high, as long as it is not bought with a loan, the house still has a strong value-preserving function. Inflation, especially after the crisis, can make money worthless, but the house will not depreciate but will increase in value. Therefore, a house is better. Of course, gold and other hard currencies are also good.

Baidu Encyclopedia-Japanese Bubble Economy