The latent power of the house.

🏠💪🏻 As a person working on numbers, this post was intended to explain the "power of house-blowing" as easily as possible!

Nat often sees posts in different groups of houses, why is it almost all "interest"?

If you want to explain it visually,

Nat, let's compare the house to "two buckets of water."

🪣 1 = Interest Bucket (Pay to the bank for free)

🪣 No. 2 = Principal Tank (Pay to deduct our real debt)

Which every month we pay the bank.

That sum will be poured into both buckets.

But the rule is that he will fill the "interest tank" first.

And then the rest goes down to the "principal bucket."

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🧮 Now let's look at the fictional numbers.

Debt balance = 9,000,000 baht

Flat rate interest = 2.90%

30 years of installment

You will get round annuities, 37,500 baht per month.

Now, the first installment we paid was $37,500.

Money will enter the interest tank (disposable): 21,750 baht

(from 2.90% / 12 * 9,000,000 = 21,750)

Into the Principal Tank (Real Debt Reduction): 15,750 Baht

Equal to the amount of debt, we still have 8,984,250 baht...

Listen and discouraged. 😅

So what we have to do to reduce interest is to reduce the balance.

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🚀 And this is why we have to "home!!"

* Home polishing is a payment added to normal annuities.

The 1st tee of the house smocking: Every baht added will jump to the 2nd leaf (the principal bucket) 100% full without being deducted at a single baht of interest! This will reduce our balance.

Tweed 2: Home interest is calculated on the basis of the "balance of debt," which means...The lower the tree, the less interest the bank will charge us next month!

In a nutshell, the more the money goes down → the principal goes down → the next month's interest goes down → the next annual payment, the more money goes down → the debt runs out faster like a rocket!

(If anyone wants to try to calculate, "How many baht will we save interest? And how many years faster to pay?" Nutmi made a self-calculating program and then uploaded it on the web. Nat put Link in the comment. Try it. ✨

Or if anyone wants to see it as a rough guide, Nut already pasted an example in the Comment below. Dip it now.)

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💡 Now come to the real world.

Interest is usually the first 3-year Fix promotion. After that, it will be more expensive to float, so we have to do Retention (Reducing Blossom) or Refinance (Moving to another bank) every 3 years.

📝, in the latest part, Nat chose Refinance to a new bank (because it was worth calculating), then he had an average interest rate of the first three years, less than 3%, and then had a pro interest of 1-2 years, lower than the third year, which in Nat's view...Nat saw that the first years were "golden minutes of popping." Money would run to cut the most money.

Anyone aiming to close the house within many years or have a great trick to share! Fight together.

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# Home installment # Home # Financial planning # Refinance # Plant a financial house