INTEREST RATES ARE A VERY CRITICAL FACTOR IN THE LENDING PROCESS, AS EVEN THE DIFFERENCE IN 11 TP3T MAY HAVE A SIGNIFICANT IMPACT ON LENDERS. THIS PAPER WILL LOOK SPECIFICALLY AT THE ADDITIONAL COSTS ASSOCIATED WITH THE DIFFERENCE IN INTEREST RATE OF 1% FROM THE PERSPECTIVE OF INDIVIDUAL HOME PURCHASE LOANS。

HOW MUCH IS THE 11 TP3T DIFFERENCE

THE AMOUNT OF THE LOAN, THE DURATION AND THE MANNER OF REPAYMENT WILL DETERMINE THE INTEREST ULTIMATELY PAYABLE TOGETHER WITH THE INTEREST RATE. IT IS ASSUMED THAT A HOME PURCHASER WILL MAKE A LOAN OF $1 MILLION WITH A DURATION OF 30 YEARS AT AN INITIAL LOAN RATE OF 4.20%。

Equivalent principal repayment mode

1. **THE INITIAL INTEREST RATE OF 4.20%**: THE MONTHLY RATE IS 4890.17 AND THE TOTAL INTEREST IS APPROXIMATELY 760462。

2. **GENERAL INTEREST RATE INCREASES OF 11 TP3T TO 5.201 TP3T**: MONTHLY ALLOWANCE INCREASED TO $5491.1 AND TOTAL INTEREST INCREASED TO APPROXIMATELY $97698。

A SIMPLE CALCULATION SHOWS THAT WHEN THE INTEREST RATE WAS INCREASED FROM 4.20% TO 5.20%, THE PURCHASER WAS REQUIRED TO PAY AN ADDITIONAL SUM OF APPROXIMATELY $600 PER MONTH, WITH AN ADDITIONAL TOTAL INTEREST OF APPROXIMATELY $21636 (APPROXIMATELY $216.3 MILLION)。

Equivalent principal repayment

1. **INITIAL RATE 4.20%**: TOTAL INTEREST IS APPROXIMATELY $631749。

2. **ADJUSTED INTEREST RATES FROM 1% TO 5.20%**: TOTAL INTEREST INCREASED TO APPROXIMATELY $78,2166。

BY WAY OF CALCULATION, THE INTEREST RATE WAS INCREASED FROM 4.201 TP3T TO 5.201 TP3T UNDER THE EQUIVALENT PRINCIPAL REPAYMENT METHOD, WITH AN ADDITIONAL INTEREST OF APPROXIMATELY $15,0417 (APPROXIMATELY $150,000) FOR THE PURCHASER。

Significant findings

AS CAN BE SEEN FROM THE ABOVE CALCULATIONS, THE IMPACT OF THE DIFFERENCE IN INTEREST RATES OF 1% IS SIGNIFICANT IN THE CASE OF INDIVIDUAL HOME-PURCHASE LOANS. THIS EFFECT IS EVEN MORE EVIDENT, ESPECIALLY UNDER THE EQUIVALENT PRINCIPAL REPAYMENT METHOD. IN ADDITION, THE DIFFERENCE IN INTEREST RATES BETWEEN 1%, WHETHER IT BE PERSONAL, BUSINESS OR OTHER TYPES OF LOANS, CAN BRING CONSIDERABLE ECONOMIC PRESSURE. AS A RESULT, LENDERS SHOULD PAY CLOSE ATTENTION TO CHANGES IN INTEREST RATES AND TAKE CAREFUL DECISIONS WHEN SELECTING LENDING INSTITUTIONS。