You might want to know if it's possible to repay the mortgage in advance. Currently, more and more people are choosing to buy property and to achieve this through bank mortgages. However, some people may repay their mortgages in advance, so can they get the money back from the bank

Can you return the loan early

The answer is no. Once you have paid in advance, your arrears to the bank are cleared and the bank has no reason to refund. So if you're going to pay the mortgage in advance, you need to consider your decision carefully in case you question it later. After all, in principle, early repayment of the mortgage can reduce the interest you pay on the mortgage, and as long as you choose the right time to pay, you do not have to regret it。

However, if you miss the best opportunity for early repayment, for example, if the remaining interest is small, then early repayment may not be the best option, because you may regret the low interest savings。

YOU MAY ALSO BE ASKING WHETHER IT WOULD BE WORTHWHILE FOR THE BANK TO COLLECT A FINE AND REPAY THE LOAN IN ADVANCE. IT DEPENDS LARGELY ON WHETHER YOU HAVE MORE OR LESS INTEREST TO PAY THAN THE FINE TO PAY. SOME BANKS, FOR EXAMPLE, IMPOSE A PENALTY OF 1% FOR EARLY REPAYMENT IF THE LOAN HAS A DURATION OF MORE THAN FIVE YEARS BUT LESS THAN THREE YEARS, WITHOUT A FINE OF MORE THAN THREE YEARS。

LET ME GIVE YOU AN EXAMPLE. ASSUMING THAT YOUR MORTGAGE IS 1 MILLION YUAN AT AN INTEREST RATE OF 4.9% FOR A PERIOD OF FIVE YEARS, AT THE EQUIVALENT RATE OF PRINCIPAL REPAYMENT, IN THE THIRD YEAR YOUR REMAINING INTEREST IS APPROXIMATELY 386.7 MILLION YUAN AND THE REMAINING PRINCIPAL IS APPROXIMATELY 870,000 YUAN. IF YOU CHOOSE TO PAY IN ADVANCE AT THIS TIME, YOU WILL HAVE TO PAY A FINE OF $8,700, WHICH IS ONLY A LITTLE LESS THAN THE REMAINING INTEREST, AND IS CLEARLY MORE PROFITABLE. ONLY WHEN THE REMAINING REPAYMENT PERIOD IS ONLY THREE MONTHS WILL THE PENALTY FOR EARLY REPAYMENT EXCEED THE REMAINING INTEREST。

In practice, however, you do not need to pay in advance at this time, as the remaining interest is only around $100 and the bank will not be fined. In summary, even if a fine is to be paid, early repayment of the mortgage is generally cost-effective。