To repay a mortgage or save money?

The volume of mortgage loans in the first quarter of this year has declined and this is because last year the so-called key principle was adopted and banks are now demanding a large first installment as collateral to be able to issue these mortgage loans . But today we will address a completely different problem, where people often cannot understand how to do better, to save money or to repay it better to cover the mortgage? Such a dilemma, certainly not for many people, but for those who have received a mortgage and money has come out, this is a serious problem, because it really does not want to give away all the money on the loan, but also it does not really make sense because the credit does there is interest and in the long run, these percentages will have to return much more money. Before we can find out which of these options is better then we should look at the percentages of both options, where the mortgage interest rate is negative because they are collected from the bank, but in the case of savings the interest is positive and they are received from this credit institution:

 

Credit Interest

Credit Interest

 A loan interest rate is a very individual indicator where the bank looks at the financial position, credit history, and other features of each customer and in this way provides loans based on this information. Typically, these rates range from 2% to 7%, including the bank’s fixed rate and the EuriBor rate, which is volatile. At the moment, for example, the EiriBor rate is very low and is under one percent, so if you have a bank rate of 2% and EuriBor is 1% then the total loan rate is around 3%, but during the economic crisis EuriBor was up to 5% and then the total loan rate was 7% or even higher. It is possible to set an average rate of 5% as the average, because even if this rate is higher for a few months, the months when it is less will equalize the overall statistics.

 

Savings Interest

Savings Interest

Accumulation of money is usually done to have both reserves and to raise the money with interest received from the credit institution where the money is deposited. Savings interest rates range from 0.05% to 3%, but are usually around 0.1-0.5% for savings accounts and 0.3 – 1.5 for long-term savings. There are, of course, a variety of other funds, such as dividends, government bonds and other securities, but they are usually much more risky and rarely able to get a 5% return on such deposits or savings / investments.

As you can see, the interest rates on the loan are much higher than the interest on the savings and therefore the best way to do it with excess money if you have a mortgage loan is to repay it on credit, because in the long run you will get much more money as you will have to pay less each month and less and therefore the overall benefit will be high. Of course, it is possible to create a reserve fund for a few months, which will give you security and allow you to continue paying your credit even without income, but it is much more profitable to repay your mortgage in the mortgage than to start accumulating and only after the loan is repaid can start thinking about long-term savings, because without these savings, it is always possible to receive SMS credit in case of emergency situations!

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