word "mortgage" in our days is familiar to everyone.Someone he improved housing, someone friends or relatives have an apartment and are now paying large sums every month.
If you are planning to purchase a property with this type of loan, you probably come with time the choice is which, or differentiated annuity payments are to be paid.
Let us consider what payments, what are and what are the benefits.
Differentiated payment - kind of payment for a loan, where the bulk of the debt is paid in equal installments, and interest will accrue on the balance.
annuity payments - the same type of loan payment, and in which the principal and interest are paid in equal installments.
What are the advantages of one over the other payments from the standpoint of the layman?
In the first case the interest is calculated on the remaining part, and as it decreases, then the payments will eventually be less and less.Depending on the timing, the amount of the monthly payments may be reduced twice as compared to the original.
definite plus in the fact that the payments are reduced over time.Mortgage take 10-25 years, and during that time the welfare of the family can greatly undermine the dismissal of one of the spouses, long-term illness, the appearance of initially unplanned child.For this reason or another family will be very difficult financially to give a large sum on a monthly basis.The constant decrease in payments which provide a differentiated payments would be very helpful.
However, there is a significant and negative.Since the amount of the debt remains unchanged and interest also has not been canceled, this reduction in late payments is achieved by increasing the first.Comparing differentiated annuity payments, you could say that the payments for the first few years will be much higher differential.Not every family can afford the financial burden.Accordingly, the banks are less likely to give "good" for mortgages with a system of payments.On the other hand, if we consider the entire amount that the borrower will give the bank together with interest - that if she differentiated payments were generally lower.
annuity have its advantages - the monthly payments do not change with time, which means you can plan your budget for many years to come.In addition, an initial amount is not so high.
But on the other hand, if the welfare of the family will change for the worse, the debt will have to pay is very difficult.
Another significant disadvantage is that in this manner the mortgage is not profitable to close early.No, some kind of benefit in any case.But the fact is that initially (in the early years), most of the payment is interest on the loan.Over time, the bulk of the debt and interest are aligned, and in recent years, the borrower pays most of the debt.It follows that, by closing a mortgage early, the family will pay not only the entire debt, but most of the interest.If
ahead of you waiting for mortgages, differentiated fees can be calculated as follows:
(Loan amount * at the monthly interest rate * Term (in months), which issued credit + 1) / 2 = the monthly interest payments.
The debt / period for which issued the credit (in months) = the value of the principal, which must be paid monthly.
However, manually calculate the monthly payment does not necessarily.Most banks post on their pages online calculators that allow you to pre-calculate the annuity and differentiated payments.Simply select the credit period, the amount of the down payment, interest rate.Mortgage calculator calculates the amount of the overpayment itself and a monthly fee.