Is prepayment a breach of contract? Is it reasonable and legal for banks to set repayment thresholds?

Recently, the interest rate of the first home loan has been lowered many times, and "repaying the loan in advance" has become a hot topic for many families. So from a legal point of view, is it a breach of contract to repay the mortgage in advance?

Article 677 of the Civil Code stipulates that if the borrower repays the loan in advance, unless otherwise agreed by the parties, the interest shall be calculated according to the actual loan period. Therefore, repaying the mortgage in advance is generally not a breach of contract, and many banks do not charge liquidated damages, but whether it is a breach of contract depends on the loan contract signed by both parties.

If there is an early repayment agreement in the contract signed between the repayment person and the bank, it is a breach of contract, then early repayment is a breach of contract; If there is no agreement, it is not a breach of contract and should not pay liquidated damages.

Why did everyone start to repay the loan in advance?

(1) The mortgage interest rate is too high and the investment income is not good, so it is better to repay the loan with idle cash on hand;

(2) The real estate speculators borrowed a lot of real estate in the early stage, the price increase was not high, and the interest cost was too high;

(3) The central bank lowered the mortgage interest rate, and the stock customers were psychologically unbalanced. For example, the loan is 3 million, the interest rate is 5.2%, and the interest to be paid in 360 years is 2.94 million. According to the mortgage interest rate of 3.8% in a certain place, the interest is reduced by nearly 654.38+0 million. How many years will this 654.38+0 million be saved?

(4) The second-hand house transaction wants to settle the loan, especially if the buyer is unwilling to accept the "secured transfer" with high interest rate (or there is no way to "secured transfer" under other circumstances), which leads to the seller's need to settle the loan and the buyer can enjoy the low interest rate.

(5) The monthly supply is too high, and I hope to reduce the repayment pressure.

Is it reasonable and legal for banks to set repayment thresholds?

In view of the problems reflected by property buyers, such as the difficulty in repaying the mortgage in advance and the long appointment time, if the borrower repays the loan in advance and the bank maliciously blocks it in violation of regulations, the borrower can complain to the China Banking Regulatory Commission and other industry associations, or bring a lawsuit to the people's court to safeguard his legitimate rights and interests.

In addition, if the borrower can't grab the reserved amount for prepayment, the bank should take reasonable measures to protect the interests of property buyers while waiting for repayment.

Usually, loan contracts are standard terms provided by banks. The party providing the standard clauses shall follow the principle of fairness to determine the rights and obligations between the parties, and take reasonable measures to prompt and explain the key clauses involving the exemption or reduction of their responsibilities.

Why don't banks want residents to repay their mortgages in advance?

For banks, it is not happy to see residents get together and repay their mortgages in advance. According to industry insiders, in recent years, the interest rate of bank loans to the real economy has dropped significantly, and residential mortgage loans have become high-quality assets with long-term stability and relatively high yield.

At present, the number of applications for incremental mortgage loans has declined, while the existing mortgage loans are repaid in advance, which naturally affects the bank's income. This is also an important reason why many property buyers have recently reported a long waiting time and banks have tightened repayment conditions.

In view of the phenomenon of "difficult to repay in advance", many experts in the industry have called for an appropriate reduction in the existing mortgage interest rate to reduce the burden on buyers and boost consumer confidence.

Under what circumstances is it not cost-effective to prepay?

(1) comrades who borrow provident fund have really low interest. However, some friends believe that after paying back a part in advance, the monthly provident fund can be deducted directly, and there is no need to save money into the account, reducing monthly concerns. In fact, it is not impossible, so everyone will consider it comprehensively.

(2) It has been paid back for several years, about half, because most of the interest costs in the previous period have been paid back. You can find a mortgage calculator to calculate this in detail. For example, the loan is 6,543.8+0,000 yuan, the interest rate is 5.05%, the loan has 360 installments, the total repayment interest is about 6,543.8+0,000 yuan, the repayment principal is about 30,000 yuan, and the remaining principal is 970,000 yuan. So it is not unreasonable to pay interest in the first few years of repayment.

(3) The mortgage interest rate is low, such as lpr minus 60BP. Withdrawal will also generate various expenses such as liquidated damages and penalty interest. I don't think it is necessary if there is no hurry and the pressure is not great.

I heard that mortgage can be converted into commercial loan. Is it feasible?

This practice may involve two violations of laws and regulations: on the one hand, financial intermediaries may submit false materials, leading to borrowers suspected of defrauding loans; On the other hand, the borrower misappropriates the operating loan, which leads to the fact that the purpose of the loan is inconsistent with the actual situation. Banks can suspend services and recover loans in advance. If borrowers fail to repay in time, they may have to bear the consequences of breaking their promises.

In order to avoid this situation causing irreparable losses to individuals, buyers who need to repay loans in advance should operate formally, not only abide by the conditions agreed in the contract terms, but also adhere to the bottom line of legal compliance, and do not blindly follow the trend and easily "trap".