Let's look at a couple of possible scenarios where you might find a reduction in the repayment of your housing loan. First, if you choose to repay the “equal principal”, then your monthly repayment will decrease over time. This is due to the fact that the principal equivalent loan modality is characterized by a higher level of prior-period repayments, followed by smaller and smaller repayments。

What's going on

Second, the banks reduced the mortgage rate to reflect your repayment. If your housing loan meets the conditions for adjustment, the bank adjusts the user's mortgage rate. When the interest rate is lowered, you may see in your repayment plan a decrease in the loan repayment amount, which is very common。

Then, if your mortgage is to be financed through a Provident Fund loan, your loan rate will be adjusted to reduce the repayment amount of the mortgage when the underlying interest rate of the Provident Fund loan is lowered。

FINALLY, IF IT IS A COMMERCIAL LOAN AND THE INTEREST RATE ON THE LOAN IS FLOATING, THE BANK WILL RE-PRICING THE INTEREST RATE ON THE MORTGAGE ON THE BASIS OF THE LATEST LPR. IF THE LPR VALUES ARE REVISED DOWNWARD, THE BANK WILL ADJUST YOUR MORTGAGE RATE ACCORDINGLY, THEREBY REDUCING THE REPAYMENT VALUE OF THE MORTGAGE。

As for the best way to repay the mortgage, it depends entirely on your personal circumstances. The advantage of the equivalent interest-rate approach is that monthly repayments are fixed, facilitate livelihood planning, especially for first-time buyers who have insufficient savings. However, lower principal and higher interest would increase repayment costs in the long run. While the repayment of the equivalent principal can reduce long-term repayment costs, it may break some of the spending plans, owing to the high monthly repayments and the low interest rates, as well as a decrease in the monthly amounts. The repayment of pre-interest, after-payment, is only a monthly repayment of interest and is appropriate in the case of a heavier first-year loan, but a lump-sum repayment of all principals is required at the time of maturity, which may be a burden for the first purchaser。