Why you should repay your mortgage early

为什么应该提前还房贷

For the first time in decades, the arithmetic suggests settling housing loans

几十年来首次出现有利的还贷数学逻辑

The holiday from reality, for the happy few enjoying it, has been delightful. Three years ago it was still possible to fix a mortgage rate in Britain and much of the euro area at somewhere near 1%. American housing loans were dearer by just a percentage point or two. 

对于那些有幸享受低息贷款的人群而言，这段脱离现实的美好时光确实令人愉悦。三年前，英国和欧元区大部分地区仍能申请到1%左右的固定房贷利率。美国房贷利率仅高出1-2个百分点。

Even as interest rates have risen and borrowing costs for new mortgages have doubled or tripled, homeowners who locked in the enviable rates of the early 2020s have been living blissfully in the past. Moreover, the inflation that prompted rates to rise has bitten chunks out of the real value of their debt.

即便在利率上升、新发放房贷成本翻倍甚至三倍后，那些锁定了2020年代初诱人利率的业主们依然幸福地生活在过去。更妙的是，推高利率的通胀反而大幅削减了债务的实际价值。

Alas, the holiday is now over for many. Although American fixed rates often last for decades, most in Britain and swathes of continental Europe expire after five years or less. It was in early 2022 that the last of the dirt-cheap loans disappeared, after which borrowing costs began climbing fast. 

可惜对多数人而言，假期已告终结。虽然美国固定利率通常持续数十年，但英国及欧洲大陆多数地区普遍采用五年或更短期限。2022年初，最后一批超低利率贷款消失后，借贷成本便开始快速攀升。

A large number of mortgage-holders, in other words, have either seen their interest bills rocket recently or will do soon. For those with spare cash to hand, a question that seemed remote a few years ago is suddenly a great deal more pressing. Should they repay the debt early?

这意味着大量房贷客户要么已面临利息激增，要么即将面临这一冲击。对于手头有闲钱的人，几年前还遥不可及的问题突然变得迫在眉睫：是否应该提前还贷？

To many who owed money during the 1980s, when interest rates soared into the double digits, the answer is an obvious “yes”. At the time, borrowing costs became so elevated that merely meeting them, let alone repaying any capital in addition, was a constant struggle. 

对那些经历过1980年代两位数利率时期的人来说，答案显然是肯定的。当年借贷成本高企，仅支付利息已捉襟见肘，更遑论额外偿还本金。

The risk of that being repeated is simply not worth taking. Better, then, to pay all debt off at the earliest opportunity, while doing so is still possible. Even if rates stay where they are at present, that will save money on future interest bills.

这种风险绝对不值得重蹈覆辙，最佳选择就是在尚有余力时尽早清偿债务。即便利率维持当前水平，也能节省未来利息支出。

Those whose experience was shaped by more recent decades might feel rather differently. Interest rates have spent most of that time on a downward trend, culminating in the ultra-loose monetary policy seen during the covid-19 pandemic. Next to that, it is the hikes of the past few years that look like an aberration.

但受近几十年经历影响的人群可能有不同看法。这期间利率长期下行，在新冠疫情期间更是达到超宽松货币政策的顶点。相比之下，近年来的加息反而像是异常波动。

More important, the opportunity cost of repaying a mortgage has outweighed the potential savings for years. This is especially obvious to those who fixed near 1% before 2022, then watched as the rates on simple bank accounts rose to several multiples of that. Under such circumstances, overpaying a mortgage, rather than depositing the cash and pocketing much more interest than repaying would have saved, would have been nonsensical.

更重要的是，多年来提前还贷的机会成本始终高于潜在节省。这对2022年前锁定近1%利率的群体尤为明显——他们眼睁睁看着普通银行存款利率升至该水平的数倍。这种情况下，选择提前还贷而非存款获取更高利息，显然不合逻辑。

The opportunity cost over the longer term, and considering the alternative of investing in shares, has been greater still. Twenty years ago mortgage rates in Britain were not much higher than they are now, at around 5%. Even with a once-in-a-century financial crisis looming, buying stocks rather than making early mortgage repayments would have paid off handsomely. 

若考虑长期机会成本与股票投资的替代选择，差距更为显著。二十年前英国房贷利率约5%，与当前水平相差无几。即便面临百年一遇的金融危机，选择购股而非提前还贷仍能获得丰厚回报。

Since the start of 2005, measured in pounds sterling, the MSCI World share index has generated annualised nominal returns of above 10%. Had your mortgage rate stayed the same for the next two decades (though in reality it would have fallen), paying off £1,000 ($1,250) in 2005 would have saved a respectable £1,800 in interest. Investing it in a global share-tracker fund would have made a profit of £6,500, however.

自2005年初以来，以英镑计价的MSCI全球股票指数年化名义回报率超10%。假设房贷利率未来二十年维持不变（实际会下降），2005年提前偿还1000英镑（约合1250美元）贷款可节省1800英镑利息，但若投资全球股票指数基金则可获利6500英镑。

Today’s mortgage-holders must ask whether such stellar stockmarket returns are still on offer. Those enjoyed by Britons have been flattered by a steep fall in the value of the pound, which has boosted the gains from foreign shares as measured in local currency. For investors around the world, a hefty proportion of recent decades’ high returns has come from ballooning stock valuations. 

如今房贷持有者需要思考：股市是否还能提供如此耀眼的回报？英国投资者此前的优异表现得益于英镑大幅贬值，以外币计价的海外股票收益兑换成本币后显著放大。对全球投资者而言，近几十年的高回报很大程度源自股票估值膨胀。

Twenty years ago, for example, the price of the MSCI World index was 22 times as high as its companies’ long-run average earnings. Now that multiple has risen to 30. Put another way, a big share of the gains came from sentiment rather than earnings. Unless investors continue to assign more and more value to each dollar of corporate profit, such a multiple limits the scope for future outsize returns.

例如二十年前MSCI全球指数市盈率为长期平均盈利的22倍，如今已升至30倍。换言之，大部分收益源于市场情绪而非实际盈利。除非投资者持续给予每美元企业利润更高估值，否则这种市盈率将限制未来超额回报空间。

As a consequence, repaying your mortgage early looks more attractive now than it has in a very long time, even including those periods when interest rates were at today’s levels or higher. That is an odd thought for central bankers, so long after they started tightening monetary policy to quell inflation, and with many of them having spent recent months loosening it instead. 

综上所述，提前还贷的吸引力已达多年未见的高位——即便在利率与当前持平或更高的历史时期也属罕见。这对央行官员而言颇为讽刺：启动加息抗通胀多年后，多数央行近月反而转向宽松。

Borrowers who were sufficiently shrewd, or lucky, to secure ultra-low rates for decades rather than years will be enjoying their holiday for some time to come. For plenty of others, reality beckons.

那些精明或幸运地锁定数十年超低利率的借款人，仍将继续享受假期。但对更多人而言，是时候直面现实了。

（红色标注词为重难点词汇）

重难点词汇：

culminate [ˈkʌlmɪneɪt] v. 达到顶点；以…告终
aberration [ˌæbəˈreɪʃn] n. 异常；偏离
sentiment [ˈsentɪmənt] n. 情绪；观点
quell [kwel] v. 平息；镇压
beckon [ˈbekən] v. 召唤；示意；吸引