If you choose to shorten the repayment period, the repayment period will be accelerated and the interest to be repaid will be reduced; If you choose to reduce the monthly supply, then the monthly supply pressure will be reduced. Of course, the interest will also be reduced, but it may be less than shortening the repayment period.
If the current monthly payment does not have too much repayment burden and you only want to pay off the mortgage as soon as possible, you can choose to shorten the repayment period; If you feel that the current monthly supply pressure is a bit high, you can choose to reduce the monthly supply.
Of course, if the customer has sufficient funds, it is also feasible to choose to pay off in advance. After paying off the mortgage in advance, you can go through the formalities of understanding the mortgage as soon as possible.
We also need to pay attention to the fact that if the mortgage chooses the repayment method of equal principal and interest, it is of little significance to make early repayment in the later repayment period, because the monthly interest paid in the later repayment period is relatively small, and most of them are based on repayment, even if it is repaid in advance, it will not reduce much interest.
How to repay the mortgage is the most cost-effective
1, repayment by installment
Installment repayment is one of the repayment methods of personal housing commercial loans. If we choose the installment repayment method, then we can divide the loan into five stages and choose the principal to be repaid in each stage according to our actual situation. For example, people who just start a business can choose to pay less in the early stage and pay more in the later stage. It calculates the repayment amount at each stage according to the average capital or equal principal and interest. Generally speaking, we need to pay less interest.
2. Biweekly payment and repayment methods
Biweekly repayment method is to change the original mortgage repayment from once a month to once every two weeks. Although the repayment pressure has not changed every month, the repayment frequency has increased, which leads to the accelerated reduction of the principal, so the repayment interest can be saved. It is more suitable for people with stable income. Biweekly payment will be very troublesome for our capital arrangement, and the penalty interest will be higher.
3. Portfolio loan
When applying for portfolio loans, provident fund loans and commercial loans can be allocated reasonably. Maximize the use of provident fund loans to extend our loan life. Try to increase the monthly repayment amount of commercial loans and reduce the life of commercial loans. Because the interest on provident fund is low, the interest on commercial loans is high. This can save our repayment interest.
Precautions for prepayment
Most banks have requirements on the time of prepayment. If repayment is made in advance before the specified time, a certain penalty will be charged. Many banks stipulate one year, while others stipulate three years. Therefore, if the customer doesn't want to pay the liquidated damages, it is best to repay the mortgage for one or three years in installments on time before applying for prepayment.
Although it is not yet possible to repay the mortgage in advance, it is not too late. Because if you operate early repayment in the later period of repayment, the interest will be almost the same at this time. Even if the repayment is made in advance, it will not reduce much interest, which is not cost-effective. It will be better for customers to apply for early repayment in the middle and early stages of repayment.