New way to buy a house! Only need to pay 1 yuan principal per month?

"Monthly principal payment for mortgage as low as 1 yuan, or no need to repay directly first!" The "interest-first, principal-later" mortgage repayment method introduced by banks on social platforms is causing a heated discussion.

During the investigation, the reporter found that many banks including Ping An Bank, China Construction Bank, Industrial Bank, and Shanghai Pudong Development Bank have launched the "interest-first, principal-later" business.

A loan manager at a certain bank branch told the reporter, "If you want less repayment pressure in the early stage, you can consider 'interest-first, principal-later'. The loan term is 3 years, and our bank usually approves it for 10 years when granting the amount, allowing for a no-repayment principal renewal every three years. In other words, if your credit remains good, you can go up to 10 years without repaying the principal."

Industry insiders stated that against the backdrop of continuous favorable policies in the real estate market, banks are also promoting various flexible repayment methods to meet the real needs of different borrowers. However, such services do not reduce the principal and interest of the loan, and borrowers should apply for personal housing loans rationally based on their own circumstances.

"Interest-first, principal-later" is popular

"If you are interested in this new property, the cooperating bank Shanghai Pudong Development Bank can offer 'interest-first, principal-later', allowing you to repay the principal after 3 years." On June 8th, a real estate agent in Zhengzhou told the reporter that Shanghai Pudong Development Bank has jointly launched the "peace of mind repayment" interest-first, principal-later mortgage repayment service with companies like KE Holdings and Longfor, reducing the repayment pressure for customers in the early stages of home purchase, providing a buffer period.

Currently, "interest-first, principal-later" has become a hot topic on social platforms. The reporter's investigation found that not only Shanghai Pudong Development Bank but also Ping An Bank, China Construction Bank, Industrial Bank, and other banks have introduced similar services. A loan manager at a Ping An Bank branch bluntly told the reporter, "In the past two to three years, all banks have been promoting 'interest-first, principal-later'."

Previously, when promoting the mortgage loan business, Ping An Bank mentioned a unique repayment method called "two-stage repayment": customers can pay interest monthly for the first 3 years without repaying the principal, and then repay the remaining loan amount in equal monthly installments for the remaining loan term. The requirement is that the loan term should not be less than 10 years and not exceed 30 years. This service has covered areas such as Shanghai, Guangzhou, Chengdu, Hangzhou, Chongqing, Dalian, and Xiamen.

"Divide the mortgage within the loan term into two stages. In the first stage, repay 1 yuan of principal and the loan interest due for that month. In the second stage, for the remaining loan term, the remaining loan principal can be repaid in the conventional equal principal or equal installment manner." A loan manager from China Construction Bank in Yunnan also told the reporter.

Customers need to borrow rationally

During the investigation, many bank personnel and real estate agents did not actively recommend the "interest-first, principal-later" service to the reporter, but only introduced it when asked. A staff member from a joint-stock bank told the reporter, "We will ask customers in advance about their needs, whether they want the principal included in the monthly payment in the early stage. Moreover, from a risk control perspective, 'interest-first, principal-later' also has certain qualification requirements for applying customers."

Regarding the effectiveness of the "interest-first, principal-later" service, different people have different opinions. A real estate agent in Zhengzhou frankly told the reporter, "If you have sufficient funds on hand, it is not recommended because the total interest will increase. However, if there is indeed a rigid demand for buying a house, and the money on hand is not enough, or needs to be used elsewhere, it can be considered."

Guangzhou white-collar worker Xiao Li, who has been working for 3 years, said: "This repayment method is equivalent to indirectly lowering the threshold for buying a house, which I think is quite promising. Because in the first few years before buying a house, one still needs to consider issues such as renovation. After paying the down payment, it is highly likely that I will still need to rent for a period of time. 'Interest first, principal later' can reduce the pressure on me a bit."

Dong Ximiao, chief researcher at Zhonglian, said that especially for young people who have not been working for a long time but are expected to increase their future income, lower loan thresholds for buying houses, and flexible and diverse repayment methods such as 'interest first, principal later' have certain attractiveness. For banks, through innovative housing credit products, providing differentiated and humanized services to meet the real needs of different borrowers, helps enhance the competitiveness of products, expand market share in the credit market, and maintain stable development of housing loan business.

However, 'interest first, principal later' and other repayment methods are ultimately just changes in repayment methods, and the total amount of principal and interest that borrowers should repay has not been reduced. Borrowers should reasonably assess their repayment ability based on personal and family needs, rationally apply for personal housing loans, choose repayment methods that suit themselves, and not blindly borrow just because the early repayment pressure is relatively small.