Is it necessary to pay off the mortgage in advance?
Early repayment is a way to save interest, but not everyone is suitable for early repayment. When you choose to repay the loan in advance, you can see whether you are in the following three situations. If it meets the situation, it is recommended not to choose to repay the loan in advance.
1, provident fund loan
The interest rate of provident fund mortgage itself is very low, and there are often interest rate cuts and concessions. Borrowers are advised not to choose to repay the loan in advance. It is more cost-effective to do some financial management with idle funds in your hands. If you have to repay the loan in advance, you may have to pay more liquidated damages than interest.
2. The repayment period of equal principal has expired 1/3.
In the average capital, the total loan is divided into two parts, and the repayment interest is calculated according to the remaining principal. In other words, in the later period, the less the remaining principal, the less interest will be generated. If the borrower repays more than 1/3, it means that nearly half of the interest has been repaid, and the later repayment is more of the principal, and the interest level has little effect on the repayment amount.
3. The repayment of the equal principal and interest has been over 2/3.
Matching the principal and interest is to add up the total principal and interest of the mortgage loan and then share it equally every month. 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.
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