Housing loans are a common form of lending, and for many home buyers, the repayment pressure can be shared by the choice of the loan-equities-e.g. principal repayment. However, some home buyers may consider early repayment of mortgages in order to reduce interest expenditure or pre-empt the debt burden. So, can the principal of the mortgage be repaid in advance? The following analysis is provided from a number of perspectives, including legal provisions, banking policies and personal interests。

Can mortgage equivalents be repaid in advance

First, the law provides that, in general, mortgages can be repaid in advance. Article 46 of the Contract Law states: “The creditor may not unreasonably refuse to pay the debtor's debts in advance during the period of its performance.” This means that the borrower may choose to pay in advance within the term of the contract, and the bank cannot refuse for no reason。

Second, banks generally allow advance repayment of interest on mortgages, etc., when formulating policies. Since early repayment of mortgages by the purchaser reduces the risk to the bank, the bank usually has a preferential policy for the purchaser. For example, an advance payment may be reduced by certain fees or interest and may have a positive impact on the credit records of the buyer. However, the policies of different banks may differ, and buyers should consult with bank staff on specific policy requirements before paying in advance。

In addition, the interests of individuals are an important factor in considering early repayments. First, early repayment would reduce the repayment period and the time of the liability. For some home buyers, early repayments would allow them to move out of the debt burden at an early date and then be more freely able to use funds for other investments or consumption. Second, early repayment would reduce interest expenditure. The repayment of the principal equivalent of the mortgage, with interest paid in the prior period being higher, is gradually reduced to repayment of the principal. Advance repayments can be effective in reducing the interest generated and thus save the cost of repayment。

However, there may also be costs and risks associated with early repayment. In the first place, the purchaser may have to pay a certain amount of default or handling fee in advance of the payment. In order to compensate for the loss of interest due to early payment, the bank charged the purchaser a certain fee. Second, there may be early repayment restrictions in some loan contracts, and the purchaser needs to check in advance the terms of the contract and whether there are any limitations. In addition, some home buyers may choose to use funds for other investments, but if the investment is risky, it may result in losses。

In the light of the above, the principal of the mortgage is repaid in advance. Before paying off in advance, the purchaser must be aware of the legal provisions and banking policy and weigh his or her interests and risks. Advance repayments may reduce interest expenditure and the time of the liability, but may involve a certain cost and attention to the existence of contractual limitations and other investment risks。