Buying a home is one of the biggest financial decisions in life. Facing the bank's repayment options โ equal installment and equal principal โ many people are left confused. Here's the simplest way to understand the difference.
Equal Installment (็ญ้ขๆฌๆฏ)
Your monthly payment stays fixed, but within it the interest share shrinks month by month while the principal share grows.
Pros: stable payments, easy budgeting
Cons: higher total interest; early payments go mostly to interest
Equal Principal (็ญ้ขๆฌ้)
Your monthly principal is fixed, so payments decline each month. Heavier upfront, lighter later.
Pros: less total interest, builds home equity faster
Cons: higher early payments, more cash-flow pressure
Side-by-Side Comparison
Assume a $1,000,000 loan at 4.2% over 30 years:
Using the mortgage calculator:
- Equal installment: $4,891/month, $761,000 total interest
- Equal principal: starts at $6,278/month, ends at $2,788, $632,000 total interest
Equal principal saves about $129,000 in interest, but you pay $600โ1,400 more per month in the first five years.
How to Choose
- Choose equal installment: stable monthly income, young families who don't want early pressure
- Choose equal principal: higher income, plans to prepay, wants to save interest
Enter your own numbers into the mortgage calculator, compare both options, and find the repayment method that fits you best.