Many people opt
for early repayment of Home Mortgage (KPR) loans to avoid the long-term burden
of debt, often driven by concerns about aging.
The question
arises: Is early KPR repayment a financially sound choice?
We could tell
that as the loan tenure lengthens, the interest payments increase
substantially. In fact, the cumulative interest can even exceed the original
price of the house, potentially doubling it.
Some finansial
planners agree that repaying KPR loan installments early can be financially
advantageous, particularly considering the expected rise in KPR interest rates
due to The Fed's policies and the anticipated interest rate hikes by Bank
Indonesia through the end of 2023.
Calculating
accelerated KPR repayment involves various components, including the remaining
principal loan, current interest, accelerated repayment penalty fees, penalty
administration fees, and potential late charges, usually ranging from 1% to 3%
of the remaining principal loan.
To illustrate the
difference between settling a KPR in the middle of the term versus adhering to
the full tenure, let's take an example: a KPR with a price of 500,000,000, a
120-month tenure, a 3% interest rate, and the intention to pay it off in the
60th month.
The calculation is as follows:
- Remaining Principal Loan
and Current Interest:
- Monthly
principal loan payment amount = Rp 4,167,000
- Monthly
interest amount = Rp 15,000,000.
- Monthly
installment payment amount = Rp 19,167,000
- Remaining
unpaid principal loan = Rp 254,147,000
- Current
interest = Rp 15,000,000
KPR Repayment Penalty: 2%
- Penalty amount
= Rp 5,082,94
Penalty Administration Fee:
3%
- Penalty administration
fee = Rp 15,000,000
The total amount
for accelerated KPR repayment includes the remaining principal loan, current
interest, accelerated repayment penalty fees, penalty administration fees, and
late charges, if applicable, totaling Rp 289,229,940.
Conversely, if
monthly payments continue as per the original tenure, the total payment would
be:
- Monthly
principal installment amount = Rp 250,000,000
- Monthly
installment payment amount = Rp 1,150,020,000
Opting for early
KPR repayment results in savings of Rp 860,790,060.
However, different
banks may have varying calculation methods, and individuals looking to repay
KPR early will require a significantly larger capital. Ultimately, the decision
depends on individual needs and priorities.
“Ray White Menteng, Your Best Property Agency Since 1998”
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