Whether to convert personal mortgage interest rate into LPR or fixed interest rate is actually inconclusive. The central bank said that the two conversion methods have their own advantages, and the specific choice depends on our own judgment, that is, our judgment on the future interest rate trend.
a
The general principle is: if you judge that the market interest rate will rise, it may be more beneficial to choose a fixed interest rate; If you judge that the market interest rate will drop, it may be more beneficial to switch to LPR.
For us ordinary people, it is too professional to judge whether China will raise interest rates or cut interest rates in the next twenty or thirty years. We should choose LPR or fixed interest rate. In fact, there is another way of thinking: that is how much you hate the uncertainty of the future.
If you feel that the current mortgage repayment pressure is not great, and you are worried that the future interest rate increase will lead to an increase in mortgage loans, and may even make family financial risks out of control, then fixed interest rates are also a good choice. Although this may make you miss the benefits of falling interest rates, at the same time, it will help you eliminate the risk of financial uncertainty in the coming decades.
b
If your mortgage cycle is still relatively long, then you can choose a floating interest rate based on LPR. It is not excluded that the five-year benchmark interest rate of LPR is 4.85% today, and it will drop to 4% after 10, and even to 3% or even lower after 20 years. Anything is possible.
And those friends whose mortgage is very short-term, if your mortgage is only one year, two years or three years, the impact is not great. After all, the change of interest rate is a slow process, not a sudden change in one day.
Of course, in the face of today's inflationary pressure, the loss of choosing a fixed interest rate is relatively small and practical.
According to the current situation, choosing LPR floating interest rate may be more beneficial to mortgage owners. Because from the historical experience, the economic growth rate has switched from high-speed development to medium-low speed. In order to ensure economic vitality, more abundant market liquidity is needed, and the probability of medium and long-term interest rates falling is relatively high.
The developed countries in the world are basically in a state of low interest rates or even negative interest rates. Therefore, the industry has almost reached an agreement. In the medium and long term, it is better to choose linked LPR than fixed interest rate.
c
If there is a plan to repay the loan in advance in the near future, it is almost the same to choose which one. Unless there is hyperinflation and deflation, interest rates will generally not change greatly in the short term.