What’s the most cost-effective way to instal your mortgage loan?
Recently, mortgage interest rates and repayment methods have become hot topics, especially with the adjustment of mortgage policies in many places, home buyers are more concerned about how to repay in installments in the most cost-effective manner. This article will combine the hot content on the Internet in the past 10 days, analyze the advantages and disadvantages of different repayment methods, and provide structured data to help you make the best choice.
1. Review of popular mortgage topics
In the past 10 days, the following mortgage-related topics have been the most discussed:
| topic | heat index | main focus |
|---|---|---|
| Mortgage interest rates cut | 85% | Banks in many places lowered interest rates for first-time home buyers to 3.8%-4.2% |
| Equal principal vs equal principal and interest | 78% | Which method saves more interest? |
| Is it worthwhile to pay off the loan in advance? | 72% | Comparison of early repayment penalty and interest savings |
2. Comparison of mortgage installment methods
Common mortgage installment methods includeEqual principal and interestandEqual amount of principal, the following are the core differences between the two:
| Comparative item | Equal principal and interest | Equal amount of principal |
|---|---|---|
| monthly repayment amount | Fixed | Decreasing month by month |
| total interest expense | higher | lower |
| Early pressure | smaller | Larger |
| Suitable for the crowd | Office workers with stable income | Homebuyers with sufficient upfront funds |
3. How to choose the most cost-effective installment method?
1.Equal principal and interestSuitable for the following situations:
- The monthly income is fixed and you don’t want to bear the high upfront repayment pressure;
- Plan to hold the property for a long time without paying off the loan early.
2.Equal amount of principalSuitable for the following situations:
- The initial funds are sufficient and you hope to reduce the total interest;
- Possible decrease in future income (e.g. approaching retirement).
4. Other money-saving tips
1.Pay attention to interest rate discounts: Some banks provide interest rate discounts for high-quality customers, and you can compare multiple banks;
2.Shorten the loan term: The shorter the loan term, the lower the total interest, but the monthly payment will increase;
3.Early repayment time: It is most cost-effective to repay equal principal and interest in the first 5 years, while it is recommended to repay equal principal and interest in the first 3 years.
5. Latest bank mortgage interest rate reference (November 2023)
| bank | First home interest rate | Second house interest rate |
|---|---|---|
| ICBC | 3.9% | 4.4% |
| China Construction Bank | 3.85% | 4.35% |
| China Merchants Bank | 4.0% | 4.5% |
Summary
Choosing a mortgage installment method must take into account your own financial situation and future plans. Equal principal and interest payments have low pressure but high total interest; equal principal and interest payments have low total interest but high initial pressure. It is recommended to make comprehensive decisions based on income stability, capital liquidity and other factors, and pay attention to the latest interest rate policies of banks to save costs.
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