The borrower shall pay interest according to the fixed interest rate signed in the contract
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A fixed rate loan is a loan made atloanDuring the term, no matter how the bank interest rate changes, the borrower will pay interest according to the fixed interest rate signed in the contract, and will not change the repayment amount due to the change of interest rate.
1. Fixed interest rate means that no matterStatutory interest rateHow to adjust? The borrower's interest rate will remain unchanged, so the repayment amount will remain unchanged, which is convenient for the borrower to arrange its own funds;
2. If the interest rate rises, the fixed interest rate will undoubtedly be fixedCapital use cost，Bank loan interest rateMaybe after the increase, the interest rate is still higher than the fixed interest rate, so that the borrower will save interest expenses, and the borrower will not have to "raise the interest rate once and have a headache once";
3. If at the stage of interest rate reduction, the borrower bears the risk of interest rate reduction, and truly realizes that "once interest rate reduction, once heartache", because the interest rate is fixed, the borrower cannot enjoy the benefits of interest rate reduction.
In general, when deciding whether to choose the "fixed interest rate" loan mode, we should fully consider the changing trend of the market and understandmonetary policyThe latest developments of are also a test for borrowers.
advantage
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The advantage of fixed rate loans is that they can avoid the risk of interest rate rise, but when the interest rate stabilizes or decreases, the lender will be locked in a higher interest rate level and pay more interest for nothing,Floating interest rateThere is no absolute difference between fixed interest rate and fixed interest rate.Common in the marketExpectation of interest rate increase，Interest rate riskAgainst the background of sudden increase, fixed rate loans have become a good tool to avoid risks, but for borrowers, it is necessary to make a correct judgment on the macro-economy, especially the trend of interest rates.Because once the fixed rate loan contract is signed, you want to modify the contract orRepayment in advance, will pay a certain amount of liquidated damages to the bank.
Advantages of housing loan
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1 For banks, the advantages of fixed rate housing loans are:
(1) Meeting the needs of different customer groups is conducive to expanding the bank's housing loan business and stimulating the consumption demand of potential housing demanders.The fixed interest rate housing loan has a fixed interest rate and a fixed monthly repayment amount. Consumers can accurately judge their payment ability according to their income, avoiding the fear of their payment ability caused by the uncertainty of monthly repayment under the floating interest rate, and inducing consumers to make bold decisions with confidence. When there is no savings to pay at any time,Enjoy comfortable housing in advance without worrying about payment difficulties.Under the floating interest rate, as the interest rate increases, the monthly repayment amount also increases. The borrower cannot make accurate predictions about the extent to which the future interest rate will rise.As the monthly repayment amount may exceed the borrower's payment capacity, the borrower's concern may lead him to abandon the loan and postpone consumption.
(2) Effectively reduce the pressure on mortgage customers to prepay a large number of loans.This reason is more realistic and urgent for banks, because after the central bank raised interest rates on housing loans, consumers, in order to reduce housing loan spending, have to repay loans in advance, and the number of such early repayment is far greater than the bank's imagination.Taking Shanghai, a national real estate hot spot city, as an example, the proportion of newly increased real estate mortgage loans in the total loans in 2005 also decreased from a high of 76% in 2004 to about 45% in 2005.In this case, the bank launchedFixed rate housing loanTo a large extent, it is hoped that this new product can avoid the risk of the central bank's interest rate increase and re promote the "depressed" personal mortgage loan market.
(3) Reduce the credit risk undertaken by banks.Compared with the floating rate, the default risk of fixed rate housing loans is less.The interest rate of floating rate mortgage is lower than that of fixed rate mortgage at the beginning, and the interest rate will increase with time, which will induce consumers without enough payment ability to use it regardless of their future affordabilityFloating rate loan。When the interest rate is low, the principal and interest can be repaid as agreed. However, if the interest rate keeps rising, the amount that the borrower must repay each month will increase significantly, and the borrower has not made sufficient preparations in advance. Once the borrower's repayment ability is exceeded, the borrower will be unable to pay the principal and interest of the loan.Even though some borrowers have short-term payment difficulties, once default is formed, it is easy to have one after another default, generating the idea of reneging on their debts, and finally being unable to repay their debts, increasing the credit risk borne by the bank.Fixed rate housing loan Because the interest rate is fixed and the monthly repayment amount is fixed, the borrower can more accurately determine how much debt he can bear when making decisions, and accurately arrange the housing loan expenditure during the debt bearing period.At the same time, it is conducive to establishing the concept of "iron abacus" of the bank and avoiding the deadbeat mentality.Therefore, in view of the fact that China's resident credit reporting system is not perfect, the borrower's qualification review is not strict enough, and the lending conditions are relatively loose, the fixed rate lending business is conducive to reducing the default rate and the bank's bookNPL ratio。
(4) Stable bank income.By taking the interest rate risk, banks have reduced the risk of default and increased their returns.In the fixed rate housing loan business, the interest rate risk is transferred from the borrower to the bank. The bank, by virtue of its operational risk advantages, operates the interest rate risk that should be borne by the borrower, expanding the bank's business scope.When transferring interest rate risk to the bank, the borrower must pay "insurance premium" to the bank, that is, let the bank set the fixed interest rate at a higher level than the floating interest rate, thus increasing the bank's income.The interest rate of fixed rate housing loan is higher than that of floating rate housing loan at the beginning. If the interest rate level drops after the loan is issued for a period of time, the borrower may repay the loan in advance.Because the bank has charged high interest for a period of time, coupled with the borrower's liquidated damages and handling fees, the bank earns more than the floating interest rate.If the interest rate rises after the loan is granted, as long as the increase is within the control and expectation of the bank, the bank will not lose money.
(5) Fixed interest rate can reduce the cost of credit management.Under the condition of floating interest rate, due to frequent changes in interest rate, the repayment amount of house buyers needs to be constantly adjusted, which will inevitably increase the management procedures of the bank and the operation is tedious, thus increasing the cost of loan management.Fixed interest rate can effectively reduce bank loan management procedures.In a fixed period, it is not necessary to adjust the repayment line due to changes in the credit interest rate in the financial market, thus reducing the cost of credit management.
2. For house buyers, the advantages of fixed rate housing loans are as follows:
(1) No interest rate risk.Fixed rate housing loan provides a risk management method for the house buyer, which transfers the interest rate risk borne by the house buyer to the bank.Once the contract is identified, no matter how the market interest rate changes, the borrower still pays the interest at the interest rate at the time of signing the contract, and does not care about the change of the market interest rate to adjust its income and expenditure plan, and does not worry about the payment difficulties caused by the increase of the repayment pressure when the market interest rate rises, which affects the normal development of other businesses, bringing the borrower time and energy savings and spiritual relaxation,Under the floating interest rate, when the interest rate rises rapidly, the borrower's interest expenditure will increase rapidly, and the mental pressure and losses caused by other business interruptions that may occur due to failure to repay the loan principal and interest on schedule will be avoided.
(2) Fixed rate housing loans give borrowers more choices.Expected inflation rateIncrease, economic growth, then choose fixed rate loans.The expected inflation rate is reduced, and the economic development is slowed downFloating rate loan。In this way, the borrower will get more benefits.If the borrower cannot predict the long-term interest rate, it is a safe method to adopt a fixed interest rate.
3 For the society and national government, fixed rate housing loans have the following advantages:
（1）Fixed rate mortgagesIt is more conducive to the fine-tuning of monetary policy on the housing market.For floating rate mortgages, when the house price rises so fast that the central bank has to raise the interest rate to adjust, not only the new loan interest rate will rise, but also the existing loan interest rate will rise.Interest rate of existing loansObviously, the change of will not affect the price rise of new houses, but will only increase the burden on borrowers and increase the credit risk of loans.Only when there is no impact on existing loans and only marginal effect on new loans can monetary policy be freely implemented.What meets this condition is a fixed rate mortgage.
(2) It can break through the downturn of housing loan business and inject new vitality into the business.According to the Report on the Implementation of China's Monetary Policy in the Second Quarter of 2005 issued by the People's Bank of China, the monthly increase of personal housing loans decreased significantly in the second quarter of 2005. The increase in May was 14.489 billion yuan, 15.937 billion yuan less than that in the same period of 2004, which was the lowest monthly increase of personal housing loans since March 2003.At the end of June, the balance of personal housing loans reached 1.74 trillion yuan, an increase of 25.59%, down 16.38 percentage points year on year.The decline in housing loans is due to the depositors' expectation of interest rate increases in the future.Since the central bank has raised interest rates for many times, the number of house buyers who choose to repay their loans in advance is increasing, which makes the banking business volume increase dramatically and overwhelmed.Since Everbright Bank launched its fixed rate housing loan business on January 5, 2006, the number of applications for fixed rate housing loan business has increased dramatically. By August 2007, Everbright Bank had issued more than 7000 fixed rate loans, with an amount of more than 3.3 billion yuan.Data from China Merchants Bank, China Construction Bank, Agricultural Bank of China and other banks also show that the new amount of fixed rate housing loans is growing rapidly.The contrast between before and after data fully shows the advantages of fixed rate housing loans in the interest rate increase cycle.
Floating interest rate
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aboutHousing loanIn other words, whether to choose a fixed interest rate or a floating interest rate may be determined by considering the following three factors: first and foremost, whether to think that China's interest rate level is in the stage of interest rate rise;The second is to carefully consider your own income. If you think your future income is relatively stable and sufficient to pay a fixed amountmortgageFor the amount, it is better to choose the fixed interest rate loan;The third is to apply for the second set or moreHousing loansWe can consider locking up medium and long-term housing with fixed rate loanslending rate, avoid interest rate andInflation risk。
Enterprises canInterest rate swap(swap) realize this conversion, which is the simplest application of fixed interest rate andFloating interest rateInterchange between.Both parties agree to pay the outstanding amount at a certain date in the futureLoan principalBased on, exchange interest payments with each other.For example, one party can get preferential fixed rate loans, but hopes to raise funds at a floating rate, while the other party can getFloating rate loan, but hopes to raise funds at a fixed interest rateSwap transaction, you can achieve thisFinancing mode。
Generally, China's interest rate changes have strong signals, such as an overheated economy,Money supplyToo fast, the stock market is too hot, and commercial bank loans are rising too fast, which may lead to interest rate increases. However, macroeconomic regulation is a "small drum with hammer". Once the interest rate increase or gradual interest rate action begins, it will usually be operated for several consecutive times to moderate regulation and adjust the economic pace.If economic growth is sluggish, commercial banks are reluctant to lend, and enterprises do not start work enough, interest rates may be cut. Similarly, interest rates will be cut steadily and continuously.In a word, the adjustment will be tentative and will not be too drastic.
Principal repayment method
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1. The method of interest payment and principal repayment on schedule (floating loan Balloon Mortgage)principalWay of repayment.During the loan period, the payment pressure is minimal, and only interest needs to be paid, but a large amount of principal must be paid when it is due. Therefore, it is more suitable forshort-term loan, not applicable to medium and long termHousing loan。It is conceivable that the last payment in this way is much higher than the previous limit, and the interest paid will be the highest in all ways.
This is the earliest form of loan. From 1930 to 1940s, the United States generally adopted the method of paying interest on schedule and repaying principal at maturity for five years based on 50% of the property value.The following isAnnual interest rate8%. Changes in the amount and principal and interest of the 20-year loan.
In this way, after the loan,principalThe interest is calculated based on the remaining principal.This kind of loan can repay the principal regularly and in fixed amount, so the total amount of interest payment will be less than the former.However, the monthly repayment of principal and interest in this way is not fixed, so it is difficult for the borrower to remember and plan its finance, and the repayment pressure is heavy at the initial stage, and the monthly total paymentLoan balanceFor those who are in the initial stage of work, the amount of payment is inversely changed with their economic ability, which is more unfavorable for their initial purchase of houses.
3. Constant Payment Mortgage loan (CPM)
This is the most commonly used amortization method for real estate financing, and its basic method is toLoan principal and interestIt is evenly distributed during the loan period, so that the repayment amount of each period is the same.After such loan, the principal and interest shall be paid in fixed amount in each installment.genusannuityAs for the borrower, it is easy to control its fund dispatching.However, in this way, most of the fixed amount paid in the initial stage of the loan is used to pay interest. Take the 8% interest rate and the 20-year term as an example. After ten years of payment, the remaining unpaid amount is up to 73%. In other words, only 27% of theprincipal。
4. Repayment of principalGrace periodGradual Payment Mortgage (GPM)
After the loan, only the interest will be paid within a certain period of time, and the principal will not be amortized. After the grace period, the principal and interest will be amortized equally.For those who are under great pressure to buy houses, the bank often adopts this method, giving a grace period of a certain period of two, three or five years to pay interest without amortization of the principal. After the grace period, the principal and interest will be amortized equally.This method is more flexible and suitable for the house buyers with insufficient funds to facilitate regular amortization after their work is stable, which is more consistent with the growth of solvency.However, the interest paid in this way is also relatively high.
FR Chicago, November 18---Housing loanFreddie Mac said that the week ending November 18,Fixed rate mortgagesThe related interest rate rose sharply. 30 yearsMortgage-backed securities(MBS) interest rates jumped 22 basis points to 4.39 percent, the highest since mid August
As a good name for housing loans, the 15 year MBS interest rate rose by 19 basis points to 3.76%, and the interest rate in the first five years was fixed and then adjusted every yearFloating interest rateThe interest rate of 5/1 hybrid ARM rose 15 basis points to 3.40%. The one-year floating rate mortgage rate was unchanged at 3.26%
On Wednesday, the American Mortgage Bankers Association (MBA) announced that the Refinancing Index fell nearly 17% in the week ended November 12 becauseMortgage interest rateUp. WithMortgage interest rateHigher, refinancing activities are unlikely to rise significantly from the current four month low, as more borrowers do not meet the refinancing requirements
Credit Suisse believes that refinancing activities have reached the peak
Domestic developments
Early morning news on March 4, Beijing time,FangdimeiThe report released on Thursday said that in the week ending March 3Fixed rate mortgagesThe average interest rate of US 30 year mortgage loan fell from 4.95% last week to 4.87%, a slight decline for the third consecutive week. The average interest rate of US 30 year mortgage loan in the same period last year was 4.97%.
