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How best to extinguish a mortgage ahead of time with annuity payments 🚩 Mortgage

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A housing loan is very expensive and burdensome for Russian citizens. Therefore, every second borrower is trying to repay the loan as soon as possible and reduce the financial burden. According to the legislation of the Russian Federation, the borrower has the right to early repay the mortgage loan, in part or in full.

As a rule, the main condition of banks for the implementation of the early repayment of the loan is the conscientious fulfillment of obligations to the creditor, delays are not allowed. The credit organization sets the type of payment. In practice, there are two types of payment annuity and differentiated. To date, more running – this is an annuity, a large proportion of the payment – interest. This type of payment is more profitable for banks, in contrast to the differentiated one, with it the principal debt is paid first and then interest on the use of borrowed funds. The second payment calculation is beneficial for the borrower, but sometimes it turns out to be quite large.

Also in the mortgage agreement immediately prescribes the minimum amount for partial early repayment and the method of repayment: with recalculation of the amount of payment or change the term of the loan.

Consider the early repayment schemes for annuity payments:

  • Recalculation of the payment schedule, without changing the amount. So the value of the monthly payment remains the same, changing the term of the contract.
  • Change the amount of payment, without recalculating the loan terms. In this case, the picture of the inverse of the amount of the regular contribution becomes less, and the period remains the same.

For quick closing of the loan, the most profitable is a scheme with a shorter loan period. Remuneration for the use of borrowed funds is charged for the entire loan period, so it will be more profitable to shorten the loan term. What do banks do? The most commonly used scheme with a decrease in annuity and the second option, an inexperienced borrower, is not even offered. Or come up with a lot of reasons why it is not convenient, for example, "you will definitely need to personally visit the bank branches to get a new payment schedule."

If you have decided to extinguish a mortgage ahead of time, you need to determine the goal you are pursuing. If you reduce an unaffordable loan payment, then we reduce the payment amount, but this method will not bring savings. And if you want to save money, then you need to not be lazy, visit bank branches and reduce the term of the loan. Let it be reduced by 2 months, not so much. But percent of the bank you pay less.

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