Jakarta, Armfalcon.com – The story about the decision of artist Andhara Early and her husband, Bugi Ramadhana, to pay off their mortgage (KPR) when they were unemployed immediately went viral.
The girl who graduated from cover 1995 said that at that time she was faced with two choices, paying off the mortgage rather than reducing the installments because they considered it more profitable.
“How much do we pay off, I do the math, I will tell my husband, if we go on for 12 years, if we spend it now, the principal of our debt is like this. He is literate, ‘Oh, that’s far.’ This really has to run out of savings, at least we’re calm,” said Andhara Early, as quoted second(28/4).
Currently, Andhara said that her life with her husband also feels lighter because there are no installments.
Is it true that paying off mortgages and paying a fine for repayment will be more profitable than paying off mortgages until maturity? Here’s an explanation.
The longer the mortgage tenor, the greater the interest expense
The longer the tenor of the proposed mortgage, the higher the interest expense you have to pay. This will affect your total spending on mortgages.
Considering that the mortgage submitted by Andhara and her husband came from a conventional bank, there will be a period when the mortgage interest rate will fluctuate following the reference interest rate.
Increased installments can burden your monthly cash flow, and if there is a floating that causes your installments to increase by more than 30% of your income, it will be increasingly difficult for you to save and invest.
Accelerated repayment will result in fines, because the lending bank will lose profits from the credit interest paid by the debtor every month.
The amount of fines or penalties imposed by banks varies, of course, but generally ranges from 1-3% of the total payment paid.
Let’s just say, if the remaining credit paid off is IDR 300 million and the penalty fee that applies is 3%, then the total payment you pay is IDR 309 million.
Partial repayment is also possible
If you don’t have enough money to pay off the mortgage in full, then you can do a partial repayment.
The goal of reducing the principal of this debt can certainly have an impact on reducing your monthly installments, even though the mortgage tenor will not be reduced.
Of course there are penalties for partial repayment, and banks also have their own requirements for partial repayment. Therefore it is very important for you to review every regulation from the lending bank.
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