Equal principal and interest repayment with low initial repayment amount
Equal principal and interest repayment with less total repayment amount
Each repayment method has its own characteristics. Equal principal and interest repayments are the sum of principal and interest, that is, the monthly repayment amount is the same. On the other hand, with equal principal repayment, the repayment of the principal is uniform, and the interest is added to it.
With equal principal and interest repayments, the initial repayment amount is small, so you can repay it without difficulty, but the interest payment will increase at first, and the final repayment amount will also increase. Equal principal repayment reduces the total amount of repayment because the degree of reduction in principal is greater than that of equal principal and interest repayment, but the bottleneck is that the initial repayment amount increases.
Equal repayment of principal and interest
The repayment amount is fixed, so it is easy to make a living plan. Available on most plans
Equal repayment of principal
You can use flat 35 and property building loans. Limited plan choices
Take advantage of early repayments
If you were able to save while paying off your mortgage, you may want to consider early repayments. Now there are financial institutions that do not charge a fee, so I would like to actively use it. When using it, it seems that there are many cases where it is advantageous to borrow for a long period as much as possible and repay it in a short period at an early stage.
All the amount of the prepayment will be applied to the principal, so you will not have to pay interest on that amount. As a result, the total repayment amount can be reduced. Remember that there is also a repayment amount reduction type that reduces the monthly repayment amount without changing the repayment period.
Total repayment amount that changes due to early repayment
| early repayment | Monthly repayment amount | total repayment amount | Years of repayment |
|---|---|---|---|
| none | 87,510 | 36,754,487 | 35 years |
| Shortening the period by 5 million yen after 3 years | 87,510 | 34,716,203 | 28 years 4 months |
| Repayment amount reduced by 5 million yen after 3 years | 87,510 ↓ 71,820 |
35,730,392 | 35 years |
*The unit is Yen. Borrowing 30 million yen with an interest rate of 1.2%, a 35-year loan, fixed with equal principal and interest repayments, no bonus repayment, and repaying 5 million yen early after 3 years
Shortened repayment period
*If you repay part ① of the principal, interest on part ② will disappear. The faster the repayment, the greater the effect.
Don’t forget the mortgage deduction
Don’t forget to report the home loan deduction that can be refunded up to 4 million yen !
Mortgage deduction is a system in which 1% of the loan balance at the end of the year is deducted from income tax for 10 years by filing a final tax return for those who borrowed a mortgage for the purpose of building, acquiring, or renovating a house. Initially, it was until the end of June 2019, but it will continue until the end of 2021 due to the enactment of the tax reform related law. For general housing, up to 400,000 yen per year and a total of 4 million yen will be refunded from income tax, so be sure to declare it!
Home Loan Deduction Overview
| End-of-year balance limits for borrowings, etc. | deduction rate | deduction period | maximum deduction |
|
|---|---|---|---|---|
| Ordinary housing | 40 million yen | 1% | 10 years | 4 million yen |
| certified housing | 50 million yen | 1% | 10 years | 5 million yen |
* There are conditions for using housing loan deductions, such as being a house that you live in yourself, having a floor area of 50m2 or more, having a loan repayment period of 10 years or more, and having an annual income of 30 million yen or less. A certified house is a house that satisfies certain standards and can be maintained in good condition for a long period of time.
PHH has been in the business of mortgages and loans for a long amount of time now. Despite some hurdles along the way, the company still has a strong customer base and manages to keep them satisfied by flexible payment plans and federally funded loans.