Olga Daineko, expert of the Center for Financial Literacy NIFI of the Ministry of Finance of Russia, in an interview “Russian Gazeta” called the best way to pay off the mortgage. According to her, it is better to do this in the first half of the loan term than in the second.
Daineko explained that mortgage payments are generally annuities. The payment is the same every month, it consists of a proportion of the body of the loan and interest. In the first half of the term of the loan, there is more interest in the proportion of the payment, and the principal debt is repaid slowly. Closer to the end of the term, mainly principal debt is extinguished.
The expert explained that the prepayment of the mortgage can be done in two ways: in part or in full. Repaying the mortgage in several instalments makes it possible to reduce the amount of the monthly payment or to shorten the duration of the loan. The first option will help reduce the financial burden, and the second will reduce the amount of overpayment.
You can also choose to reduce your payment and ensure some creditworthiness in difficult times, but continue to pay the same amount as before. In this case, part of the funds will go into a mandatory payment, and part – for early repayment on demand. This will gradually reduce the monthly payment and, in the future, close the mortgage earlier, says Daineko.
“But for this it is necessary that the contract does not have minimum restrictions on the amount of prepayment, for example, at least 40% of the payment,” drew the attention of the financier.
To partially repay the debt, you need to contact the bank with a statement when depositing money. The request must indicate the amount to be paid. Otherwise, if you have just deposited funds into the account, they will simply be debited according to the schedule.
In addition, the mortgage can be paid off in full. To do this, the total amount of the debt and the accrued interest after the last payment are deposited in the account. The borrower who has repaid the debt will be granted a mortgage and all encumbrances will be removed from the dwelling.
Previously, the National Bureau of Credit History (NBCH) determined the family’s most comfortable income to pay a mortgage. At the end of 2021, it amounted to 90.2 thousand rubles. Thus, the recommended income level for six months has increased by 15.4%. In June 2021, this figure was 78.2 thousand rubles.
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