For many people, the down payment to buy a house requires years of hard work to earn, and they also have to apply for a bank loan. What loan and repayment methods can make you more profitable when buying a house? Let me do some calculations for you below.

Currently there are three ways to obtain home purchase loans: commercial loans, provident fund loans, and combination loans. No matter which loan you choose, there are only two repayment methods, namely equal principal and interest repayment and equal principal repayment.

Equal principal and interest repayment means adding the total principal and interest of the loan, and then evenly dividing it into each month of the repayment period. The amount repaid by the repayer to the bank is fixed every month, but the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month.

Equal principal repayment is to spread the principal to each month, and at the same time pay off the interest between the previous trading day and this repayment date. This repayment method requires more principal and interest to be paid in the early stage, and the repayment burden decreases month by month.

In order to facilitate comparison and explanation, we use specific numbers to calculate. If the current price of a house is 2 million, a loan of 1.2 million is needed now, and the loan term is 30 years. Now let’s calculate how much each type of loan will cost in repaying the principal and interest when it matures in 30 years.

1. Two repayment methods for commercial loans:

1. Commercial loans, the repayment method adopts equal principal and interest: after 30 years of this repayment method, the loan interest will reach 1092739.43 yuan, about 1.093 million yuan;

2. Commercial loans, the repayment method adopts equal amounts of principal: If this repayment method is used for 30 years, the interest on the loan will be 884,450 yuan, close to 885,000 yuan.

2. Two repayment methods for provident fund loans:

1. Provident fund loans, the repayment method is equal principal and interest: after 30 years of this repayment method, the loan interest will be 680091.3 Yuan, about 680,000 yuan;

2. Provident fund loan, the repayment method is equal amounts of principal: after 30 years of this repayment method, the loan interest will be 586,625 yuan, about 587,000 yuan.

After 4 calculations, the loan interest generated by commercial loans using equal principal and interest repayment for 30 years is 1.093 million yuan; provident fund loans using equal principal repayment for 30 years will generate interest The loan interest is only 587,000 yuan, and the difference between the two is about 506,000 yuan.

It can be seen from the above calculations:

1. Provident fund loans are cheaper than commercial loans because the interest rates of provident fund loans are low;

(The above answer was published on 2017-06 -27, the current relevant house purchase policies shall be subject to actual conditions)

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