Is it worth repaying the mortgage in advance?
Whether it is cost-effective to repay the mortgage in advance needs to be comprehensively judged from the aspects of repayment amount, repayment period and repayment method, and cannot be generalized.
The following three situations are not suitable for prepayment.
1, when signing the loan contract, enjoy the interest rate discount of 30% to 8.5%. As we have enjoyed a lower discount rate, we are now in the channel of interest rate reduction. If the central bank doesn't cut interest rates during the year, even if the latest interest rate is implemented at 65438+ 10/in June next year, the interest rate will only be lower than that in the previous period.
2. Buyers whose repayment period of equal principal has passed 1/3. Since the average capital divides the total loan amount by half of the cost, the repayment interest is calculated according to the remaining principal. In other words, the later this repayment method is, the less the remaining principal will be, so the less interest will be generated. In this case, when the repayment period exceeds 1/3, the borrower has already paid nearly half of the interest, and the later repayment is mostly the principal, and the interest level has little effect on the repayment amount.
3. Buyers who have reached the medium-term repayment of principal and interest. Matching principal and interest repayment adds up the total principal and interest of the mortgage loan, and then distributes it evenly every month. The monthly loan interest is calculated according to the remaining loan principal at the beginning of the month and settled monthly. In other words, the proportion of principal in the monthly repayment amount increases month by month, and the proportion of interest decreases month by month. By the middle of repayment, most of the interest has been paid off, so it is of little significance to repay the loan in advance.
Precautions for prepayment
1. Allow banks to repay loans in advance at different times.
Most banks require at least one year before they can apply for prepayment, but some banks say they can apply for prepayment at any time. Among the state-owned banks, China Bank and China Construction Bank need to repay for one year before they can apply for early repayment, while Industrial and Commercial Bank of China needs to repay half a year in advance. In addition, it takes one year for banks such as China Merchants Bank and Bank of Communications to apply for prepayment, while Huaxia Bank said it can apply for repayment at any time.
2. The interest rate adjustment cycle of banks is different.
The general mortgage term is more than 10 years. During this period, it is inevitable for the central bank to adjust interest rates, and the time for banks to adjust interest rates is different. Banks in China, such as China Industrial and Commercial Bank, China Agricultural Bank and China Construction Bank, etc. Generally, from June 65438+1 October1every year, the new repayment interest will be adjusted according to the latest central bank benchmark interest rate.
Foreign banks generally choose to adjust in the current month or quarter. Citibank will implement the new interest rate at the beginning of the next quarter and HSBC will implement the new interest rate on the same day.
For mortgage owners, it is obviously more cost-effective to adjust as soon as possible if they are in the channel of interest rate reduction; If it is in the interest rate hike cycle, the later the adjustment, the more cost-effective.
Don't forget to cancel the mortgage registration after "paying off the mortgage"
Regardless of whether the loan is repaid within the contract period or in advance, citizens should not forget to cancel the mortgage registration after the loan repayment is completed.
See who has the title certificate, and there are several procedures to get it back after the loan is paid. One of the simplest cases is that the original title certificate has been mortgaged in the bank. If this is the case, the buyers will get the repayment voucher after paying off the loan or paying off the loan in advance, and the bank will also return the original real estate license and the original sales contract to the buyers. In this way, buyers can get back their real estate license, which has nothing to do with the bank.
However, due to the different operating regulations of different branches of banks, some branches only need to register the mortgage once, and buyers can hold their own real estate licenses with mortgage registration marks. That is, before the loan is paid off, get the real estate license in advance, and other items on the real estate license will indicate the current situation of the house. If this is the case, after the buyer has repaid the loan, in addition to repeating the above steps, he has to go through the formalities of canceling the mortgage registration. After the buyer and the bank complete the settlement procedures, they can cancel the mortgage registration at the Housing Authority, that is, they can stamp the cancellation seal on other columns of the real estate license.
Is it cost-effective to repay the mortgage in advance? People who borrow mortgages can repay in advance, but whether it is cost-effective depends on their actual situation, and targeted analysis can be more targeted. Some people may be cost-effective, while others are not. No matter whether it is good for you to repay the mortgage in advance, as long as you have the corresponding ability to repay the mortgage and want to repay the mortgage, you don't need to be in debt. You can take the way of repaying the mortgage in advance without hesitation and entanglement.
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