Is the prepayment of mortgage loan principal or interest?
Repay the principal. After handling the mortgage, if you repay the loan in advance, it will naturally be the principal, and there is no interest on prepayment. However, after the borrower repays part of the mortgage in advance, the interest will be recalculated, not according to the original approved loan amount, but according to the remaining unpaid loan principal.
After partial repayment in advance, you can choose to reduce the monthly payment and keep the repayment period unchanged; You can also choose to shorten the repayment period and keep the monthly payment unchanged.
If the borrower chooses to pay off all in advance, it is the principal and interest of the loan. However, the interest to be repaid is not the interest of the whole repayment period calculated according to the previous repayment plan, but only until the borrower pays off the day.
How to calculate the prepayment principal of the average capital equal to the principal and interest?
1 First, we need to know the difference between the equal principal and interest and the average capital. It is the same to pay the same amount of principal and interest every month. Interest is the main interest in the early stage and principal in the later stage. The average capital repays the same principal every month, with more principal in the early stage and less in the later stage.
If the repayment period is long, most banks only need you to pay off the remaining principal, and usually won't let you pay interest. However, there is a big gap between the average capital and the repayment of equal principal and interest in advance, and the remaining principal of equal principal and interest will be more, and the remaining principal will be less after the average capital.
In addition to prepayment, it is estimated that many people may consider transferring commercial loans to provident fund loans. Then if you consider transferring to provident fund loans in the future, then I suggest you adopt the repayment method of equal principal and interest.