Matching principal and interest refers to adding the total principal and interest of mortgage loans to the repayment period on average. It is calculated according to compound interest. At the settlement time of monthly repayment, the interest generated by the remaining principal will be calculated together with the remaining principal (loan balance). Using the equal principal and interest repayment method, although the monthly repayment amount seems to be the same, in fact, the equal principal and interest pay more interest in the early stage and less principal, and the less interest paid in the later stage, the more principal.

Average capital refers to the total amount of loans obtained by mortgage of real estate is divided equally during the repayment period, and the equal principal and interest generated by repayment of the remaining loans every month. Using the repayment method of average capital, the monthly repayment gradually decreases, but the interest and principal to be repaid in the early stage are more.

First: if you repay in advance.

The monthly reduction of the average capital is much less than the equivalent principal and interest, and the latter has more principal. If you choose to repay in advance, the average capital will pay more principal in advance and less interest, so it is more cost-effective.

Second: Do you buy a house for investment?

Now many friends buy houses for investment. Since it is an investment, we should consider capital leverage and rate of return. In the early stage, the matching principal and interest were less and the leverage was great, while in the early stage, the average capital paid more, which increased the down payment considerably and the leverage was very small. If you want to sell the property in a short time, it is more cost-effective to choose the same principal and interest.

Third: Are you under great repayment pressure now?

If the financial pressure is not great, you can choose the repayment method in the average capital. Although there are many prepayments, the total interest paid is less. If the financial pressure is relatively high, you can choose the repayment method of equal interest. Although you pay more interest, there is no such pressure in the early stage.