When buying a house after 1990, is it better to choose a 20-year mortgage or a 30-year mortgage?

When buying a house, whether to choose a 20-year or 30-year mortgage loan, you must first look at your personal financial earning capacity. Only when this condition is met can you have the opportunity to choose, and then according to your own Compare the difference in interest rates between the two based on the actual situation, and then make a choice based on the characteristics of social and economic development combined with your own values.

In addition to the interest difference between a 20-year mortgage and a 30-year mortgage due to the different length of time the funds are used, the most obvious thing is that the monthly repayments are different, corresponding to Home buying customers will experience different repayment pressures. Take a commercial housing loan of 1 million yuan with a base interest rate increased by 10 (i.e. 5.39) as an example. Calculated based on equal principal and interest, the monthly payment for a 20-year term is 6,817 yuan, while the monthly payment for a 30-year term is 5,609 yuan. There is a difference between the two. 1208 yuan. The higher the mortgage loan, the greater the difference. Houses in first- and second-tier cities often cost millions. The difference in repayment pressure between a 20-year mortgage and a 30-year mortgage will be relatively large.

The bank needs to evaluate the customer's repayment ability. It usually requires that the monthly repayment amount does not exceed 50% of the customer's monthly income. Of course, different institutions will have some differences in the ratio requirements, but if you buy a house After the applicant's income is recognized by the bank, if the calculated repayment amount when applying for a 20-year mortgage loan exceeds the bank's set ratio of monthly payment to income, then the applicant may not be able to pass the approval, or the bank may lower the mortgage loan amount. amount to match the customer’s income.

The above are the prior influencing factors of choice. Only when such conditions are met, further consideration can be made.

The conditions mentioned above can be flexible. If you want to get a 20-year mortgage, I believe there are many ways to make your income match the bank's requirements. But everyone's situation is different, and you must consider the real situation, because the pressure does not only come from buying a house, but also factors affecting life that need to be considered.

1. People whose income is relatively tight compared to housing loans can choose a housing loan with a longer time limit.

Although the post-90s generation is relatively young, most of them have already entered the stage of getting married and married. Many of them have to bear the living expenses of the entire family. They are full of responsibilities and a lot of pressure. The shorter the term of the mortgage, the greater the monthly expenditure, which will squeeze out the use of other living expenses, may reduce the quality of life, or affect cash reserves and accumulation, making it difficult to cope with sudden needs for money in life. Of course, people with high incomes and good prospects will find it no problem, but for people with relatively tight incomes and average career prospects, the pressure is not small. In this case, it is better to choose a longer period of 30 years. This can reduce the pressure on yourself first. As time goes by, if your situation improves in the future, you can reduce the mortgage loan by repaying all or part of it in advance. interest payments.

2. People with relatively high incomes can choose 20 or 30 years according to their own needs.

People with relatively high incomes are not sensitive to the pressure caused by 20 or 30 years, and can decide the length of the period according to their own ideas. If you are interest-sensitive, you can choose a 20-year term, because based on the above example of a 1 million home loan, the interest rate is 5.39. Calculated based on equal amounts of principal and interest, the total interest for the 20-year term is more than 630,000 yuan, while the 30-year term The total interest is nearly 1.02 million yuan, and the gap between the two is still very big. If we look at it from such a static point of view, and look at the total amount calculated after the term is used up, it is undoubtedly that the shorter the term, the lower the cost. .

However, some people will choose a 30-year mortgage loan from the perspective of capital utilization and inflation. This is a dynamic perspective, and not everyone needs to consider it this way. We use this perspective below. Let’s express it as independent content.

In fact, usually there is no need to consider it so complicatedly. The following contents are not necessary to consider. You can measure them from your own perspective.

1. The relationship between mortgage term and fund utilization.

In the current financing environment, there are almost no loan products like home loans that can be used for 20 to 30 years. At the same time, it is also difficult to find low-cost products with annualized rates as low as close to the benchmark interest rate. Taking these two factors together, mortgage loans are almost the only loan products that can meet the above two conditions at the same time. From the perspective of fund use, they have absolute advantages over other products. If you have the ability to manage finances, you will have to pay back your mortgage slowly and slowly. On the other hand, getting less means that you continue to occupy more low-cost funds from the bank, especially for customers who want to repay their loans in advance. If you know how to manage money, and combined with inflation, the income from financial management can cover the interest cost.

However, this is different from the credit funds that can be used in full at once. For buyers who cannot pay in full, the mortgage has already been broken into parts, and they need to slowly break it up later. In order to accumulate funds that can be used, even if there is financial management income, it will not be much better than interest; and for customers who can pay off the full amount, it is equivalent to replacing the funds in their hands with bank mortgage funds, which can be understood as utilization The mortgage loan opportunity provides an equal amount of low-cost funds. If you have the ability, you can use these funds to make money. The profits plus inflation will more easily cover the cost of interest.

Therefore, considering the relationship between fund utilization has different effects on different people, and not everyone needs to consider this issue.

2. The relationship between mortgage term and inflation and its brief description.

The relationship between mortgage term and inflation is actually the relationship between time and inflation. Judging from the development of our society, as time goes by, it is a trend that cash continues to depreciate and prices continue to rise. Every year, our investment in M2 (broad money) maintains a relatively high growth rate. M2 is the total money supply in society. When the growth of total resources in society cannot match the growth of money, it will easily cause inflation. Needless to say, this For specific data, you can know from your own experience alone that 100,000 yuan in cash was worth much more 10 years ago than it is now. The longer time passes, the more severe the depreciation will be.

Looking at home loans from this perspective, if we think of home loans as a sum of cash taken from the bank now, it will undoubtedly continue to depreciate in the next twenty or thirty years. The longer the same time, The greater the depreciation, but it doesn’t matter. It is bank money. As long as our income continues to grow along with the development of social economy and inflation while devaluing, our actual costs will be less when the inflation factor is added. A lot, and at the same time, repayment will become easier and easier. From this perspective, we are not afraid of making the mortgage period longer.

To sum up, there are actually advantages and disadvantages to setting a 20-year mortgage term and a 30-year mortgage term. Whether it will be a beneficial choice for you needs to be considered based on your own situation. To put it simply, if you have more money, you can consider a shorter term, and if you have less money, you can consider a longer term. If you want to consider the long-term use value of funds and the impact of inflation, you can also set a longer term.

Mr. Wang bought a house with 800,000 yuan in full in 2015. The house is now worth 2 million yuan. He spent all his savings when buying this house. In the following years, house prices have risen sharply. , during this period he also wanted to buy another house, because it was a two-bedroom house, and he wanted to buy a bigger one, but how much cash did he have in hand to buy it? If he had used a mortgage when he bought the first house, he would If you have the opportunity to buy another one, the original one can be rented out, and the rent can be used to pay off the mortgage.

The current benchmark interest rate for commercial loans is 4.9, which is far lower than other loan interest rates on the market. It is difficult for a person or a family to be short of money for a lifetime, and there will be a lot of trouble when borrowing money. From this perspective, high interest rates can be as long as possible. If you can get 30 years, choose 20 years.

The peak period of your career is after the age of 30. At that time, your income grows rapidly, and your subsequent income can cover your monthly payment. The monthly payment will drop a lot during the 30-year loan period. It's also easier to pay off.

For example, for a 1 million loan with a term of 30 years and a base loan interest rate, the monthly payment is 5,307 yuan.

For a 1 million loan with a term of 20 years and a base loan interest rate, the monthly payment is 6,544 yuan.

The way the market economy operates determines that its currency issuance will always exceed the economic growth rate. The result is that the currency will always depreciate and inflation will occur. In a period of continuous currency depreciation, the total amount of loans will is beneficial to the debtor.

To summarize, from an economic point of view, 30 years is recommended, but everyone has different hobbies. Some people don’t like the feeling of owing money, and feel that 30 years is not a safe period, and they even hate it. If you can’t buy it in full, then you will feel at ease, and you will feel at ease when doing things. This is just because of people.

Let me answer!

Personally, I think those who were born in the 1990s and are in their twenties should definitely choose 30 years. The longer the loan period, the better. The longer the loan period, the lower the monthly payment. I still regret that I was in my twenties in 2002. When I bought my first home at the age of 18, I chose a short loan term. I was under great pressure to repay the loan in the first two or three years. In those two or three years, I didn’t dare to do anything, not even to change jobs. I wasted two or three years in a small company without social security. When I was young, I needed social security for five consecutive years when I bought my second home. I kept waiting for social security. The longer I delayed, the more expensive the house became. I always regretted not changing jobs earlier.

If you choose a longer loan term, the monthly repayment pressure will not be so great. You can keep more money on hand for turnover, whether you change jobs or start a business while you are young, and you will feel more confident. You can make more efforts to stay young, otherwise it would be unfair to have your youth tied up with monthly payments. Besides, it is good for your health to be less stressed and relaxed. Don’t forget that good health is 1 and the house is followed by 0. Without 1, no more 0 will matter. Meaningless.

Of course, the question mainly depends on your own economic situation. If you are financially wealthy but don’t want to make other investments, the shorter the loan period, the less interest you will save. However, the mortgage interest rate is the lowest and most cost-effective among all commercial loans and credit loans. If you have money in the future, you can repay it in advance. In addition to inflation, there is no comparison between a thousand yuan twenty years ago and a thousand yuan now. Therefore, I personally think that the loan term should be thirty years, and the longer the better.

Currently, housing prices are at a high level, and mortgage interest rates are also at a high level. At present, most of the urgent needs are to buy a house.

If you need to buy a house, you will buy a house if you can afford the down payment. The difference between choosing a 20-year and 30-year mortgage is that the total interest in 20 years is much smaller than the total interest in 30 years.

For example, assuming a 500,000 commercial loan, the total interest will be close to 350,000 for 20 years. If the loan is 30 years, the total interest will be close to 520,000. However, the monthly payment pressure in 30 years is less than that in 20 years.

Of course, the current mainstream view is that you can apply for a bank loan for as long as you want. If you don’t get a loan this time, it will be difficult to get a loan in the future. This is nonsense, not to mention that Alipay and JD.com both have credit loans. Now, all major banks have corresponding small loans available, and some of the interest rates are lower than Alipay, so it is the last word to find a bank loan and save money!

Someone may want to suggest that you use a mortgage loan for investment and financial management. Nonsense, the current mortgage interest rate is basically above 5.8, and the current most capital-guaranteed electronic treasury bonds and large deposits are less than 4.3. How to invest? If it is to be used for stock trading or other financial management, it is not certain whether the principal can be guaranteed, but that is a story for another day!

After loaning for 20 years, the total interest will be close to 70% of the principal. This is the total time cost of buying a house for 20 years. Work hard. Not only should the subject repay the loan on time, but when the funds are sufficient in the future, Apply for a one-time repayment in advance and save some mortgage interest!

For easy calculation, assume a purely commercial loan of 700,000, with an interest rate of 15% off, 4.11, and the average loan period for Chinese people is 8 years. That is to say, whether you loan for 20 years or 30 years, we plan to By the tenth year, the remaining loan can be paid off in one lump sum.

Start the calculation below:

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Loan for 20 years

Attachment 1

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30-year loan

Attachment 2

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Early settlement in the eighth year

20 years

Attachment 3

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Early settlement in the eighth year

30 years

Attachment 4

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Got The conclusion is:

In the eighth year you paid off all the money.

If your loan is for 20 years: ***Repayment: 992588, about 990,000, 477,000 was repaid in the first eight years, and 515,000 was taken out in one lump sum in the eighth year.

If your loan is for 30 years: ***Repayment: 1,014,728, about 1.01 million, 398,000 was repaid in the first eight years, and 616,000 was taken out in one lump sum in the eighth year.

In other words, you will pay 800 yuan less every month and reduce the pressure. The result will be that the total price will be 20,000 yuan more (interest) when you settle it after 8 years. Of course, every month in the first 8 years The short payment of 800 will also have to be made up in one lump sum, and the price difference totals 101,000 yuan.

In other words, for a person who has taken a 30-year loan and spent 20,000 yuan, the loan repayment pressure within 8 years will be slightly easier.

So the suggestion is: If you don’t have much pressure to repay the loan, choose 20 years;

If you have a lot of pressure to repay the house after buying a house, choose 30 years, and the country will give you Time to work hard.

What’s the point of eight hundred yuan? It’s probably what you pay for meals in the cafeteria for a month. Sometimes people just don’t have enough food.

So how to choose the appropriate loan term?

After deducting expenses, the monthly household income leaves the necessary reserve funds (for buying a car, medical treatment, travel, favors and courtesy), and see how much can be used for investment every month. Financial management, if you can't find a financial management project that is higher than your expectations and higher than 4.11, then all the money can be used to repay the loan, and the period of time is selected based on this reverse.

However, for example, if you trade in stock futures, although it is unstable, the overall expected value is above 4.11, then the longer the loan term, the better, and you can beat the bank loan interest rate.

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Guidance:

The current social Young people: At the very beginning of entering society, they have potential and motivation, but they are short of money. They have to buy a car, buy a house, decorate, and get married. The financial pressure is huge, but time is on our side. Choose a 30-year loan. , giving you space to strive and grow, and hope you can grow quickly.

For those with good family conditions and no shortage of money, just pay in full (just kidding, I will talk about investment and financial management configuration next time)

Updated

June 2018 , I had to invest in a house for some reasons, and the interest rate went up, 500,000 in cash and 1.1 million in loans. It’s already the time to take over from a high position.

The investment interest of 500,000 is calculated as 20,000

The loan interest of 1.1 million is 65,000

So if the book price of the house price can be calculated at 85,000 per year If it goes up, I won’t lose money.

The national book inflation rate is more than 4%

The actual inflation rate is more than this number

Therefore, from an inflation perspective, house prices should increase by 6.5% every year Ten thousand.

The above inference may not be realized in the short term. Looking at the big cycle, it can still be profitable in 5-10 years.

Therefore, buying a house and investing can be said to be buying an insurance and betting on a ticket for the future.

Of course, this depends on what kind of house you buy. Don’t buy a house with too big a bubble. At least you need a net inflow of population. You can invest in low-value areas around Beijing, Shanghai, Guangzhou and Shenzhen. Your leverage is low and it is not easy to explode.

As an industry insider who has been in the real estate industry for more than ten years, I would like to draw my conclusion first: For those born in the 1990s, no matter what the circumstances, 30 years is the best choice.

Three reasons:

First, a mortgage is the cheapest money you can borrow in your life. So you can borrow as long as you can, and you can borrow as much as you can.