Deadline (finance)
The due date indicates the date on which an operation must be performed. This operation may be the partial or total repayment of a debt , the exercise of an option , the payment of rent, the collection of a dividend , etc.
A financial transaction can have a whole series of deadlines. In this case, they are usually regularly staggered over time, and we speak of monthly payments, quarterly, annuities, etc.
For financial assets , the term to maturity or maturities is the duration to the total repayment or the duration (the average duration of all repayments).
Home loan
In 2007 , the decision of the duration is no longer only the monthly payment paid but also the desire to become owner or not, because of the enlargement carried out by some organizations such as Crédit Foncier de France over a period of 25 years or even 40 years. years. [not clear]
The borrower must find a compromise between: ” Favoring his monthly quality of life thanks to a low monthly payment or limiting the financial cost of the loan to the sacrifice of a significant monthly effort ”
Remarks
- The rate over a long period is inevitably increased by about 0.30 to 0.60%.
- The risks of accidents in life are more numerous over a long period.
- If the borrower wants to sell his property within 10 years and if he has made a loan over 30 years, he has still paid back almost no capital and so he has as much as at the beginning.