Mortgage loans can be made with equal amounts of principal and interest.

Equal principal and interest refers to a repayment method for a home purchase loan, which means that the same amount of the loan (including principal and interest) is repaid every month during the repayment period. The monthly repayment calculation formula is as follows: [Loan principal × monthly interest rate × (1+monthly interest rate)^number of repayment months]/[(1+monthly interest rate)^number of repayment months-1]. Interest first and then principal is a repayment method in which interest is exchanged monthly and the principal is repaid once upon maturity. During the repayment period, only the interest is repaid and the principal is not repaid.

Equal principal and interest repayment: suitable for people with stable incomes

According to industry insiders, the most popular repayment method currently handled by banks is equal principal and interest repayment. This repayment method is to add the total principal and interest of the mortgage loan and then spread it evenly over each month of the repayment period. As a repayer, you pay a fixed amount to the bank every month, but the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month.

Repay the mortgage loan in equal installments of principal and interest. The borrower will bear the same amount every month, which makes it easier to arrange income and expenses. The equal principal and interest repayment method is especially suitable for people with stable incomes and those who buy a house to live in and whose economic conditions do not allow excessive initial investment.

Equal principal repayment: suitable for people with higher incomes

In addition to the equal principal and interest repayment method, equal principal repayment is also a more common method of repaying a mortgage. , the borrower can gradually reduce the burden as the loan repayment years increase. This repayment method spreads the principal to each month, and at the same time pays off the interest between the previous repayment date and the current repayment date.

The characteristic of using equal principal repayments is that the borrower’s monthly burden is heavier when starting to repay the loan than equal principal and interest payments. However, as time goes by, the repayment burden will gradually decrease. Compared with the equal principal and interest method of the same term, this repayment method has a lower total interest expense.

Repayment of principal with interest on schedule: Suitable for real estate investors

"Repayment of principal with interest on schedule" means that the borrower negotiates with the bank to formulate different repayments for the repayment of loan principal and interest. time unit. That is, you can decide on your own to repay at monthly, quarterly or annual intervals. In fact, the borrower combines the monthly repayments into several months and repays them together according to different financial situations. It is reported that the bank that currently adopts the repayment method of paying interest and principal on schedule is China Merchants Bank. Principal repayment plan The borrower negotiates with the bank, and each principal repayment is not less than 10,000 yuan, and the interval between two repayments is no more than 12 months. Interest can be repaid monthly or quarterly.