Matching principal and interest is a loan that pays the same amount every month during the repayment period (including principal and interest, in which the principal is increasing and the interest is decreasing, that is to say, less principal is deducted from the previous monthly principal and interest, and more interest is paid). Because the monthly repayment amount is fixed, it can control the expenditure of family income in a planned way, and it is also convenient for each family to determine the repayment ability according to their own income.
In the average capital, the principal is repaid in equal amount every month, and then the interest is calculated according to the remaining principal, so the interest will be paid more at the beginning because of the large principal, so the repayment amount will be more at the beginning, and then it will decrease every month. The advantage of this method is that because the initial repayment amount is large, the interest expense will be reduced, which is more suitable for families with strong repayment ability.
Comparing the two repayment methods, if you choose an equal amount of average capital with the same term, you can pay less interest, because the monthly payment deducts more principal than the equal amount of principal and interest. Then after each repayment, the less the remaining principal, the less the interest. As for which way to choose, it depends on your financial conditions. If it is predicted that there will be other demand after the mortgage is completed, you can choose the equal principal and interest with less pressure. When you have completed all the major events, you can save some money in the bank to apply for partial repayment or settle the loan in advance, and only need to pay back the remaining principal (some banks will charge a little extra penalty). If you are a high-income family, the monthly payment only accounts for a small part of the family income and expenditure, and there is no financial pressure, you can choose the average capital.
Loan principal: 450,000 yuan
Loan term: 25 years (300 months)
Several situations in which the interest rate remains unchanged and the loan is fully paid off:
☆ Calculated by commercial loans with equal principal and interest.
Annual interest rate: 6.8% (monthly interest rate 5.6667 ‰)
Monthly payment: 3 123.32 yuan.
Total interest: 486,997.34 yuan.
☆ Calculated by commercial loans and average capital.
Annual interest rate: 6.8% (monthly interest rate 5.6667 ‰)
Monthly payment for the first month: 4,050 yuan
Decreasing month by month: 8.5 yuan
Monthly payment at the end of the month: 1508.5 yuan.
Total interest: 383,775 yuan