When buying a house in Changzhou, how to choose the loan period? Is the longer the loan period, the better?

When most people who apply for commercial loans to buy a house choose the loan period, they are likely to hover between 30 years and 20 years. Of course, people with stronger financial strength may also choose 15 years, 10 years, etc. . However, when faced with this problem, many people say "the longer the loan term, the better", and then resolutely choose 30 years. Is this really right?

Three reasons tell you why the loan should be loaned for 30 years

1. The monthly repayment pressure is small

Many people buy houses for marriage, but After buying a house, you still have to face a series of expenses such as getting married, having children, buying a car, etc. This is a big expense for a young couple or even two families. The longest loan term can reduce the monthly repayment pressure and can also Let the couple breathe a sigh of relief.

For example, if you borrow the same loan of 2 million yuan for 20 years, you will have to repay nearly 13,100 yuan per month in equal principal and interest. If you have a loan for 30 years, you will only need to repay nearly 10,600 yuan per month. In this way, every month You can have an extra balance of nearly 2,500 yuan per month for living expenses.

However, it is also important to note that the monthly payment should not exceed 50% of the monthly income. If possible, try to control it within 30%, otherwise the quality of life will be reduced.

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2. The longer the loan term, the more suitable it is for early repayment

Generally speaking, bank repayments are to repay the interest first and then the principal. Since you have already paid off most of the interest, repaying the loan early does not make much sense.

For example, take a loan of 3 million and pay it off in one lump sum after 5 years:

If the loan is for 20 years, you have already paid back nearly 1.178 million, and you still have to pay back nearly 250.9 Ten thousand, the total repayment is 3.687 million;

If the loan is for 30 years, you have repaid nearly 955,000, and you still have to repay nearly 2.762 million, for a total repayment of 3.717 million.

It can be seen that the interest of a 30-year loan is only 30,000 more than that of a 20-year loan, but your quality of life in these years is very different.

3. You can buy a bigger house

Since the longer the loan term, the lower the monthly payment, then why not borrow more and buy a bigger house? You know, if you have a loan of 2 million with a term of 20 years and a monthly payment of 13,088 yuan, and a loan of 3 million with a term of 30 years, the monthly payment is 15,921.8 yuan. The difference between the two is only 2,833.8 yuan, but the total difference is 1 million.

There is a big gap between houses with a total price difference of 1 million yuan, whether in terms of unit type, location, area, facilities, or location.

So, should everyone take out a loan for 30 years?

The answer is naturally "not necessarily", because banks will review the borrower's income when issuing loans to determine whether the borrower's monthly income is enough to repay the monthly mortgage payment, so the income is unstable and the credit is unstable. Even if a bad person wants to borrow for 30 years, it will be very difficult.

Moreover, borrowers must determine the loan method and term based on their income and actual situation. When applying for a mortgage, the premise is that it will not affect family life, and the ratio of monthly payments to family income must be carefully considered. If this ratio is too high, it will inevitably reduce other household expenses, thereby affecting normal family life.

(The above answer was published on 2017-05-31, please refer to the actual relevant current house purchase policies)

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