Is it better to choose equal principal repayment or equal principal and interest repayment for mortgage loan?

The mortgage loan in China started late, and the calculation formula of equal principal and interest and average capital is very complicated. Ordinary loan buyers have limited understanding of housing loans, and in recent years, media reports are not professional, and citizens are misled by various "shocking slogans."

In fact, these reports are not misinformation, but different situations are suitable for different people, and it is not curable by all types of drugs. So what is it that the principal and interest match the average capital?

1. Matching principal and interest and introducing average capital.

1, equal principal and interest: monthly payment = principal+interest, and the monthly payment is the same (on the premise that the benchmark interest rate remains unchanged).

2. Average capital: monthly payment = principal+interest, the principal is equal every month, the interest decreases with the principal, and the monthly payment decreases month by month.

Two. Calculation method of equal principal and interest and equal repayment method of average capital: monthly repayment amount = loan principal × [monthly interest rate× (1+monthly interest rate) repayment months] = [(1+monthly interest rate) repayment months]

Average capital repayment method: loan principal/loan term+[loan principal-loan principal/loan term * (n-1)] * annual interest rate/12.

When you see these calculation formulas, does it make people's minds blank? It is a headache to distinguish between "equal principal and interest" and "average capital". This formula is both a "power" and a "power", not to mention the calculation result. Unfortunately, in order to facilitate everyone to calculate the monthly payment, some platforms have developed a "mortgage calculator", which can easily calculate the monthly payment by inputting key factors such as loan amount, loan term and execution interest rate, and choosing a good repayment method. Such a "mortgage calculator" is easy to find on Baidu.

Figure 1 and Figure 2: 1, with a loan amount of 500,000 yuan;

2. The loan term is 240 months (20 years);

3. The benchmark interest rate is 4.9% (in the chart, the monthly sum is used as a micrometer, and the annual interest rate of 4.9% is converted into the monthly interest rate of 4.08333‰).

Third, how to choose a housing loan is cost-effective?

? Looking at the calculation results of monthly payment in Figure 1 and Figure 2, the "accumulated interest" of the equal principal and interest is 285,000, and the "accumulated interest" of the average capital is 246,000. The same 500 thousand years seems to be more cost-effective in terms of average capital. In addition, in the case that the customer does not specify it, the bank defaults to the repayment method of equal principal and interest with higher interest. In recent years, the media has also reported many reports that banks are unwilling to let customers choose "average capital", and once they "will". But is this really the case?

In fact, whether it is equal principal and interest repayment or equal principal repayment, the calculation method of interest is to multiply the principal balance borrowed from the bank by the corresponding monthly interest rate (agreed annualized interest rate/12 months) to calculate the interest that you should repay to the bank in the current month. In other words, the interest rates of the two different repayment methods are actually the same. The reason why the calculated interest is different is actually because you are paying back the principal every month. The more principal you borrow, the more interest you have to repay. If you borrow less principal, you will have to pay less interest.

? To be more intuitive, let's analyze the data in Figure 1 and Figure 2. The current principal in figure 1 and figure 2 with the number of periods 1, the equivalent principal repayment in figure 1 is 1230.56, the equivalent principal repayment in figure 2 is 2083.33 and the current interest in figure 1 and figure 2 is 204/kloc. The matching principal and interest is about 852 yuan less than the monthly payment in the first phase of the average capital repayment method, and the interest is 204 1.67 yuan, but the principal is paid 852 yuan more. Since the interest of the bank is calculated according to the balance of the principal, the principal has been paid 852 yuan more since the first period, so the interest of the average capital will be less than the interest of the equal principal and interest since the second period, which is equivalent to early repayment every month, which is naturally less than the final interest without early repayment.

Through the above calculation, can we see that the two different repayment methods are fair? There is no problem of utilization loss, which is more cost-effective Banks are unwilling to take the initiative to choose the average capital because, compared with the equal principal and interest, the monthly repayment pressure in the average capital is great, which is not suitable for customers who just bought a house; In addition, the monthly payment in the average capital is decreasing every month, which makes it inconvenient for customers to remember the repayment amount; In addition, the calculation formula is complex, which ordinary customers can't understand at all, and the bank loan staff are busy and unwilling to explain more, which leads to the average capital repayment method being once "deified". This is not designed by banks to earn more interest, but in practice, banks put forward to choose the average capital repayment method when applying for loan interviews, and banks will accept it.

Therefore, if your initial capital is not too tight, you can choose the average capital method to reduce all interest expenses; If the funds are tight in the early stage, you can choose the method of matching the principal and interest, so that although there are many interest expenses in the early stage, the financial pressure will be less. In the case of abundant funds, appropriate early repayment can also achieve the effect of reducing interest expenses.