Is it smart or foolish to repay the mortgage early? A friend who has worked in the bank for many years said to me: In fact, many people are still "giving away money for nothing"! Regarding the matter of repaying the mortgage early, many people think that it is too early

Is it smart or foolish to repay the mortgage early? A friend who has worked in the bank for many years told me: In fact, many people are still "giving away money for nothing"!

Regarding the matter of prepaying the mortgage, many people feel that paying off the loan early can get rid of the debt and feel at ease. But a bank friend secretly told me that many people are actually "giving money for nothing"!

Early repayment sounds like interest saving, but it depends on how you pay it back.

Do you choose to repay a fixed amount of money every month (equal principal and interest), or let the monthly amount gradually decrease (equal principal)?

If you don't have much left in your loan, most of the monthly payments are actually repaying the principal, and at this time, you will not save much interest by repaying the loan early.

The second is that loans usually have "liquidated damages". That is, if you repay the loan in advance, the bank is not happy, and it will overcharge you for liquidated damages. Some banks stipulate that if the loan is repaid within one year, the interest of not less than three months of the actual repayment amount shall be paid as liquidated damages.

Conversely, if you don't make your prepayment payments, you can take advantage of the tax benefits of your mortgage. For example, the first housing loan can enjoy a personal income tax deduction of 1,000 yuan per month. If you repay the loan early, it means that you will forfeit this part of the offer.

If you still have a certain amount of investment and financial management ability, you may have higher returns if you use the money you save to invest. However, this requires you to have enough knowledge of your own financial situation and the investment market. (Be cautious when investing!)

Is it smart or foolish to pay off your mortgage early? You have to decide according to your actual situation, and other people's choices may not be suitable for you.

Finally, don't forget that banks are not charities, they are there to make money, so before you decide to repay the loan early, make sure you make sure to make sure that your hard-earned money doesn't end up in the bank's pocket.