When buying a house to apply for a commercial loan, you should choose the repayment method according to the lender's economic situation. If the personal income is relatively high, I suggest you choose average capital, if the income is relatively low, I suggest you choose equal principal and interest. Equal repayment of principal and interest: equal repayment of loan principal and interest every month. In this way, at the initial stage of repayment, the interest expense is the most, and the principal is relatively small. Average capital repayment method repays the same amount of loan principal every month, and the interest decreases month by month with the principal, and the monthly repayment amount also decreases month by month.

Characteristics of average capital and equal principal and interest

1, average capital

Average capital refers to a repayment method of loans. During the repayment period, the total amount of loans is divided into equal parts, and the same amount of principal and interest generated by the remaining loans of the month are repaid every month. In this way, because the monthly repayment amount is fixed and the interest is less and less, the borrower is under great pressure to repay at first, but as time goes on, the monthly repayment amount is less and less.

The total expenditure of this repayment mode may be reduced relative to the matching principal and interest, but the repayment pressure is greater at first.

If it is used for mortgage, this method is more suitable for people who are at the peak of work or are about to retire.

Average monthly repayment amount of capital = (loan principal/repayment months)+(principal-accumulated amount of repaid principal) × monthly interest rate.

2. Equal principal and interest

Matching principal and interest refers to a repayment method of housing loans, that is, repaying the same amount of loans (including principal and interest) every month during the repayment period. This method has a fixed monthly repayment amount, which can control the expenditure of family income in a planned way and facilitate each family to determine the repayment ability according to their own income. This method is more suitable for borrowers with low current income, stable or increased expected income, or people with clear budget and stable income, generally young people, especially young people who have just joined the work, to avoid excessive contribution pressure in the initial stage.

Generally speaking, banks will recommend the second repayment method of equal principal and interest, but in fact, if the upfront funds are sufficient, the repayment method in average capital is more cost-effective.

Monthly repayment amount of equal principal and interest = [loan principal× monthly interest rate× (1+monthly interest rate )× repayment months ]/[( 1+ monthly interest rate )× repayment months].