for most buyers who just need to buy houses, in order to reduce interest expenses, they generally have two options, namely, repaying the principal and interest in advance with equal amount, and reducing the loan amount. However, in fact, these two options are not cost-effective!

Let's start with a case:

You applied for a mortgage of 2 million yuan, and the principal and interest will be paid off in 3 years. The monthly repayment amount in the first year is as follows:

This year, the principal of expenditure is 3,45.37 yuan, and the interest of expenditure is as high as 97,323.23 yuan, which seems to be quite cost-effective. But if we think about it this way, with a loan of 2 million yuan, we will only pay interest at first, and all the principal will be paid in the next installment. How much will we pay back in the first year?

needless to say, the first year is full of interest, and the repayment expenditure for this year should be 2 million× 4.9% (the benchmark annual interest rate for more than five years), and the result is 98, yuan, which is 676.77 yuan more than the first year's expenditure calculated by our equal principal and interest. The reason why the equal principal and interest will be less is because we have paid back a small amount of principal.

do you understand? In fact, as far as the interest cost is concerned, the bank charges interest completely according to the regulations and does not charge a penny more. If you pay back 1 million yuan at one time in the fifth year, and there is still 1 million loan left, then you only need to pay back 49, yuan every year. Let's look at the amount of money repaid in one month after the equal principal and interest repayment method:

2 million mortgage, and the monthly repayment amount in the 36th installment is 1,614.5 yuan, of which the principal is 1,57.9 yuan, and the interest is only 43.15 yuan. The interest is calculated as follows: residual principal × monthly interest rate, which is 157.9×4.9%÷12=43.15 yuan.

there is nothing wrong with the bank's calculation of interest, which is based on the current payable interest calculated by the residual principal, and so is the repayment method in average capital.

as for the repayment method of equal principal and interest generally recommended by banks, the main reason is that most people have great pressure on repayment of equal principal, and not many people choose this repayment method. In fact, there is no difference for banks. Even if customers choose to repay the same amount of principal, the funds they recover as soon as possible will be re-loaned. From this perspective, the bank's profits will not increase or decrease because of the different repayment methods of buyers.

There are many sayings on the Internet, among which a common misunderstanding is that the equal principal and interest repayment method can choose to repay in advance in the first third of the repayment cycle, on the grounds that most of the repayment at the beginning is interest, and choosing to repay in advance in this time period can save a lot of interest costs.

next, let's talk about why prepayment is not cost-effective.

First, the interest rate of 4.9% is only nominal, and the real interest rate is lower than this level

To understand this problem, we must first talk about the current monetary policy. The introduction of any monetary policy is aimed at stimulating economic development. Maintaining a certain inflation rate is an important way to stimulate economic development at the monetary level, all of which are true. A certain inflation rate can encourage consumption, expand production and increase. The more depressed the economy, the looser the currency and the lower the interest rate. What is the way to maintain a certain inflation rate? Naturally, it is to increase money supply.

In fact, inflation will be maintained for a long time to come, even if interest rates fluctuate in the future.

with this affirmative answer, our loan interest rate of 4.9% should be re-examined. Specifically, the interest rate of 4.9% is only a nominal interest rate, while the real interest rate is only 4.9%-1.9%=3% after deducting the inflation rate in the same period (mainly in CPI).

Secondly, it is very important to maintain a certain amount of liquidity.

With a certain amount of liquidity, you can earn income by purchasing wealth management products. Although the annualized rate of return may be lower than the loan interest rate of 4.9%, don't forget that liquidity can also reduce your opportunity cost.

For example:

You have 2 million working capital, and the total price of the target property is 2 million. You have two choices: 2 million is used to buy a house and 36 thousand is down payment.

choose the former, with a down payment of 2 million yuan and a working capital of .

choose the latter, with a down payment of 6, yuan and the remaining working capital of 1.4 million yuan.

The former has no monthly payment cost, while the latter needs to repay the loan on a monthly basis, which seems to bear the interest cost, but from the perspective of opportunity cost, the latter is superior to the former.

further, we may not be qualified to buy a house now, but what if we are qualified to buy a house in the future? At this time, I'm afraid everyone will buy a house, and house prices will rise. And your money has been used to repay the loan, and you probably won't have the money to buy a house again. Because the house is a low-liquidity asset, it is difficult to get out in a short time after all the funds are invested in the mortgage. Even if you decide to sell the house immediately, it will take some time to get rid of it, and the selling price may be unsatisfactory. Here is the opportunity cost.

This is a case of buying a house again. In fact, the channel is not limited to buying a house, but the premise of grasping the opportunity is that you have a working capital. The same is true of using working capital to repay loans in advance, which is equivalent to reducing your liquidity. If you use funds to repay loans in advance, your liquidity is equal to zero.

For young people, it's better to buy their first house, borrow as much as possible, choose the longest loan period, choose the equal principal and interest instead of average capital, and it's not appropriate to repay the loan in advance. At the foreseeable income growth level, it is cost-effective to borrow as much as possible.