Housing Loans (KPR) are quite important when they want to buy a house, because the increase in house / property prices tends to be higher than the increase in income. On this occasion, we will discuss matters that must be considered in taking out a KPR, examples of mortgage products and how to pay off a mortgage properly.
Before Home Loans to Find Houses in Accordance with Capabilities, Calculate Use a Mortgage Calculator
When you want to buy a house by applying for a mortgage, of course you have to do planning first. The first thing to consider is the price of the house, why? Because of course when you pay mortgage payments, you do not want to stop in the middle because you can not afford to pay again. Therefore, when you buy a house, you have to look at a house that suits your financial capacity at that time.
When we apply for a mortgage, we must give a down payment. And in general the ideal advance for us to give is 30% of the price of the house. There are some people who pay an advance under 30%. In fact, that may be done, but it will burden the installments later. The ideal monthly installment is 30% – 35% of the monthly salary. Because in general, a married person, his monthly expenditure is approximately 70% of his income or usually lower than that, if there is some savings that must be prepared.
For example, if you have an income of IDR 10 million, then the ideal maximum home installment is IDR 3.5 million per month.
To make it easier for you to plan your mortgage, we prepare a mortgage calculator
The Mortgage Loan (KPR) is a tool that can provide a large estimate of the down payment and mortgage payments that you will pay each month and your total loan after calculating the interest rate.
This tool is very useful for those of you who want to apply for a loan and intend to find out more about whether your income is enough to pay installments every month. Our calculator can project a large down payment and monthly installments as well as the time it takes for the borrower to repay the loan. If you know the amount of down payment, installments and total loans you need, at least it will be easier for you to apply for a loan that suits your needs and abilities. The most important thing is to ensure that your income is sufficient to pay for the loan.
Use annuity interest options – effective for calculating. The assumption of the calculation above is that bank interest will always remain the same. Today many banks provide fixed rate offers for 3 – 5 years. Year 6 and then the interest will be floating interest.
What is the maximum installment that I can pay? Installments that you can pay a maximum of 30% of income. If you have not been able to pay, then you should increase the down payment
Quick Ways to Get Rid of Mortgages
If we want to pay off mortgages quickly, we will use a combination of several strategies. Starting from having a fixed savings account, making an early repayment, extra periodic installments, then taking over to a Sharia Bank
The key to how to quickly repay KPR is the first point, namely “Fixed Savings”. The repayment method that I will describe is actually a standard method, which is to reduce the loan principal so that it has implications for the portion of interest we have to pay each month.
On conventional bank mortgages, an annuity system usually applies where the concept is that your installments will remain during the credit period (if there is no increase in loan interest rates). In the fixed installments, there are 2 components, namely credit principal and loan interest.
In the first years the bank will take a very large portion of interest. For example, if you apply for a credit of Rp136,500,000 with an interest rate of 12%, in this first year the bank has the right to earn interest at 12% x Rp136,500,000 = Rp16,380,000!
Consider the following illustration (an example of an illustration of a BTN bank):
Credit Filing = Rp. 136,500,000 (12% interest rate, for 120 months)
Monthly Fixed Installments = Rp2,013,200
Total Installments = Rp2,013,200 x 120 months = Rp241,584,000
Total interest = Rp241,584,000 – Rp136,500,000 = Rp105,084,000
From the illustration above we can see, in the first year alone the bank has taken interest of 15.58% of the total interest that it should have earned. And don’t be surprised, the real debt principal has just been reduced by Rp.7,778,400 alone, very small compared to the total annual installments of Rp24,158,400 or only 32.19% of the money you have paid to the bank.
Compare this with the Sharia KPR method below which has a different calculation method:
Credit Filing = Rp. 136,500,000 (margin 7.57%, for 120 months)
Bank Profit = 7.57% x 10 x Rp136,500,000 = Rp103,330,500
Total Financing = Rp136,500,000 + Rp103,330,500 = Rp239,830,500
Monthly Installments = Total Financing / 120 = Rp1,998,587
The disadvantage of Sharia Mortgage is that early repayment or extra installments will not reduce the nominal of Total Financing. So how fast you pay and how much you make extra installments, still you will pay as much as a total of IDR 239,830,500 to the bank.
Here are some alternatives that you can try to outsmart the above. Our goal this time is to make every effort to reduce bank profits whether in the form of interest or margin (for Islamic banks). Back to the first point that has been confirmed beforehand, we will now rely on Fixed Savings. Basically outside the mortgage installments, if we are a little disciplined, we can allocate a percentage of our income to save.
In this mortgage problem, banks usually only allow monthly installments of a maximum of 40% of fixed income. In theory, we can still allocate 10% – 15% of income to save. This accumulation of savings is what we will use to change the mortgage calculation.
Now try to see the following illustration. Imagine you have an income of IDR 10,000,000 a month. If you are a KPR participant, you can pay in installments up to a maximum of IDR 4,000,000 per month. Or a year is IDR 48,000,000. From the previous calculations we know that in the first year, only 32.19% of the total installments reduced the principal debt, the remaining 67.81% was interest. Now we try to calculate if the funds of IDR 4,000,000 per month are for two, IDR 2,000,000 for mortgage payments, IDR 2,000,000 are you allocated to Fixed Savings. In theory, in this first year, your financial position will be:
- Has repaid a mortgage of Rp. 24,000,000 (principal of Rp. 7,725,600, interest of Rp. 16,274,400).
- Have savings of as much as Rp. 24,000,000 which can be used to reduce the loan principal.
Meaning you just turned things around! Now the portion of the interest you pay has changed to only 33.90% of the money you spend a year.
Now after you have fixed savings (plus profits). There are several alternative ways so that you can use these funds effectively.
- If you accumulate enough of your fixed savings, you can pay off a portion of your loan principal at a conventional bank, then you will take over to a sharia bank with a short period of time and a low margin.
Paying off a portion of the loan principal
there is still as much as IDR 80,000,000, you can take over to BNI Syariah. With a period of 30 months and a margin of 6.10%, BNI Syariah only takes profit of IDR 12,200,000. Note: You must repay a total of Rp3,073,333 per month for the next 30 months, then your installments will be completed. Do not forget there are costs that arise in the take over process such as notary fees, insurance, administration and other fees.
- If the accumulation of fixed savings and other additional income is enough to pay off your loan principal at BTN, you can pay off all at this time. You will be charged a penalty fee of 1% of the remaining credit principal.
- Perform Extra Installments regularly. Extra installments are facilities provided by conventional banks that deviate from the usual installment payment scheme. This Extra Installment can be used to reduce the loan principal with the following conditions:
- Has paid a mortgage of at least 12 months.
- Minimum installment amount of 5x monthly installments.
To be effective, make this extra installment payment after paying your mortgage repayments for the month, so that this nominal is not used by the bank to pay the interest for the month.