QUOTE(matrix88 @ Apr 20 2019, 05:52 PM)
this is what i am thinking off. means paying off more principle earlier is better, reduce more interest charged, right?
the other guy ask me to invest the money rather than pay off more principle, but this will end up with high interest payment, low principle payment, then forever paying for high interest lo, principle dont move....
Principle will always move, it is calculated as per your installment, this is why it is called a term loan. It has a tenure, and the installment paid will reduce the principle within the stipulated tenure as long as there are no changes to the interest rates (of which the banks would ask you to increase your installment anyway). There is no such thing as "principle don't move", you are not taking an overdraft housing loan, are you?
The reason it is important to think about this is because there are people who can earn more than the mortgage interest rate. I am not asking you to do anything dude, whatever you want to do is up to you. but it is important to know all the options in hand before making a decision. And I'm not just some guy, I teach people these things on a daily basis, mortgages is what I do for a living; it should help to listen to my opinions as many already have
QUOTE(apalexar @ Apr 20 2019, 07:42 PM)
Guess the monthly payment is calculated and fixed by the bank, if you want to make any prepayment perhaps you can gather up the extra few hundreds each month and pay in lump sum to bank after you have save it up to an amount.
Not sure if you can make prepayment every month with just few hundreds, anyone have idea about this?
For most housing loan, the installment is fixed, but the interest calculated will be reduced, I've already shown the example above if still don't understand then it is not on me
For the benefit of others:
You do not need to make a huge lump sum. Some banks will take all the advanced payment to reduce the principle and thus reduce the interest payable. Different banks have different acceptance of this though. Some would not consider advanced payments to reduce the principle.