Yes, the shorter the loan term, the less interest the borrower pays to the bank, but the higher the monthly repayment amount, the greater the repayment pressure. How many years to choose as the loan term mainly depends on the family income level.
The best performance of the loan should reach the "best combination" state, and it is possible to pursue the highest mortgage amount (70% of the appraised house price), the least down payment and the most reasonable loan term within the scope of its own debt capacity (economic affordability). Its purpose is to reduce the expenditure on house purchase as much as possible.
On the contrary, the longer the loan term, the higher the total interest paid by the borrower to the bank, but the monthly repayment amount will be reduced, and the repayment pressure will be reduced accordingly. Therefore,
When choosing the loan term, the cost of capital should be considered. The borrower must choose the loan term according to his personal situation. The general principle is to ensure that he has enough living expenses besides monthly repayment, that is, to ensure that his repayment ability is slightly surplus. If it is too tight, it will easily affect the borrower's personal credit record.
Extended data
When applying for a mortgage, the age of the borrower is an important audit factor. Generally speaking, as long as the borrower reaches the age of 18, he can apply for personal housing loan, requiring that the borrower's age plus the loan period should not exceed 65 years, otherwise it will not be accepted.
Therefore, the younger the borrower, the longer the loan period he can apply for. If you are over 40 years old, the longest loan period can only be less than 25 years.
The age of the house is also an important factor for the bank to determine the loan term, especially when buying a second-hand house, the bank will comprehensively calculate the loan term according to the remaining ownership time of the house. If the house is too old, it may not be available for the longest period.
The borrower's capital cost should also be considered when choosing the loan term. For those who have investment channels, long-term loans are more favorable, they can invest freely, and the return on investment is enough to repay long-term loans and have a surplus. For people who haven't made other investments except repaying loans, it is better to avoid paying too much interest first, and it is more appropriate to use short-term loans.