Mortgage is a long-term responsibility of many people's lives, and perhaps you would ask, "If I paid my mortgage in advance, would the pressure be eased?" The good news is, after early repayment of the mortgage, the next calculation of interest will probably make it easier for you。

How do you calculate interest on the advance repayment of the mortgage

“How to calculate interest after early repayment of the mortgage?” That's the problem we're going to solve. Commercial banks usually pay low fees for early repayment, and their policy of early repayment is often very favourable to borrowers. However, there are many options for calculating interest after early repayment。

THE FIRST WAY IS TO CALCULATE ON THE BASIS OF THE INTEREST RATE OF YOUR MORTGAGE. FOR EXAMPLE, IF YOUR ORIGINAL INTEREST RATE IS 4.9%, THEN THE INTEREST RATE AFTER EARLY REPAYMENT WOULD ALSO BE 4.9%. THE ADVANTAGE OF THIS APPROACH LIES IN THE SIMPLICITY OF THE CALCULATIONS, BUT THE DISADVANTAGE IS THAT INTEREST MAY BE HIGHER AFTER EARLY REPAYMENT。

ANOTHER APPROACH IS TO BASE CALCULATIONS ON CURRENT MARKET INTEREST RATES. SO IF YOUR ORIGINAL INTEREST RATE IS 4.9% AND THE MARKET RATE IS 4.5%, YOUR INTEREST RATE WILL BE 4.5% AFTER EARLY REPAYMENT. THE ADVANTAGE OF THIS APPROACH LIES IN THE FACT THAT INTEREST MAY BE CALCULATED AT A LOWER LEVEL, WHICH WOULD FACILITATE REPAYMENT BY THE BORROWER. HOWEVER, IF THE MARKET INTEREST RATE INCREASES, SO WILL THE INTEREST RATE AFTER YOUR EARLY REPAYMENT, WHICH WILL PUT PRESSURE ON THE BORROWER'S REPAYMENT。

If you decide to pay your mortgage in advance, you must first call the hotline of the bank in which you operate and apply for an advance payment through manual services; then take your identity card, loan contract, repayment card and title certificate or purchase contract and go to the bank's designated site. After this, you are required to deposit the amount paid in advance into the repayment bank card, and the bank’s staff will then help the borrower to go to the Housing Authority to process the write-off, so that the bank system automatically deducts the corresponding amount from your repayment bank card and completes the prepayment。