In my previous article on home savings, I talked about home savings paid in addition to a home loan, and comments show that many are miscalculating how much they will benefit from such a combination.
So let’s do a bit of this now.
First, let’s see what’s the use of saving a home on your loan?
The first is that you can pay off 20,000 more installments a month so that if you get stuck, you can cancel your home savings at any time without affecting your credit. (Beware! This is only true if you did not take out a “home savings loan” but a regular annuity home loan and made a voluntary home save on your own. if you put it on a combined loan) you don’t pay it as if you didn’t pay the loan, because home savings are just as integral to a loan as paying interest, so if you put a home savings together with your loan, does not apply.)
Having one (or more) self-made home savings gives you that much flexibility is an advantage.
Benefit is that you can fix your loan interest rates for a longer period
I have said many times that with the current low interest rates, it is worth choosing a long interest period, because if you do not do so, you will be bitterly surprised when interest rates start up, as new loans are priced at a reference rate. (Time to fix interest rates.)
Yes, but a longer interest period (5-10 years fixed rate) is more expensive than a 3 year interest rate. (A wise person does not currently choose a 3-6 month and one year interest period at a base rate of 2.1%, which can only increase.)
Home saving can also help. If you can open up enough home savings to fully replace your current 3-year loan after 4 years, then you have the option of using a flat 5.23% APR loan for up to 84 months.
If, by some miracle, your loan rate is still below 5.23% in 4 years, thank you, but you are not asking for a home savings loan, if you do, you simply replace it with your current loan.
Of course, there are two pitfalls here: can you pay for enough home savings for four years to get enough, and you will pay higher interest rates from the end of the third year to the end of the fourth year.
(Yeah, I heard they want to eliminate the 3% LTP because it is not worth it for companies with current government bond yields. If that’s the case, don’t be surprised, it’s strangely not done so far.)
How much do you gain from paying home savings on your loan?
Someone wrote that instead of taking on a higher monthly repayment, he made a $ 20,000 home savings and was five hundred thousand better off in four years.
Well, that’s certainly not true. Not least because the total yield of the best 3% four-year product is 369,000 forints for four years. It includes all the interest, the state subsidy, its interest and everything.
From this, the opening fee (HUF 24,600), the monthly account management (HUF 48 × 150) and the possible bank charges of the transfers have to be deducted, ie a maximum of 337 thousand.
And here’s the point: if you were to pay off 20,000 a month into paying off your loan, you would be paying much less interest to the bank, since it would reduce your debt and thus the interest payable on it.