Why You Should Maximize Your Mortgage Loan When Buying a Home

The biggest risk in buying a commercial property today isn't quality defects—it's loan complications arising from abandoned projects. Quality issues are essentially unavoidable; you can only seek legal recourse after problems emerge. However, we can mitigate the risk of project abandonment by opting for a housing mortgage instead.

Under current regulations, when a commercial property purchase contract is terminated, the homeowner may also terminate the mortgage loan contract.

What's the relationship between a mortgage contract and a commercial property purchase contract? When buying a home, we rarely pay the full amount upfront. We first pay a deposit, then the down payment, and then those who take out loans go through the mortgage process, while those who don't pay in installments.
A housing mortgage involves pledging the property you intend to buy to the bank, which then lends you the money to purchase it. In practice, however, this money goes directly to the developer rather than passing through your hands.
To ensure transaction safety, banks typically should not release the full amount immediately. But in reality, due to various reasons, banks have a customary practice of disbursing the entire loan to the developer once construction reaches the "zero point"—that is, after the underground portion is completed and above-ground construction begins. For units sold afterward, once the buyer completes the loan process, the funds are usually paid to the developer within days.
When a developer's capital chain breaks, it triggers a chain reaction. The immediate consequence is that the developer loses the ability to fulfill the contract, making delays in handover inevitable. At this point, owners suing to terminate the purchase contract typically get court support. Once the purchase contract is terminated, the mortgage contract can also be canceled, meaning the owner no longer needs to repay the bank mortgage and won't be blacklisted.
If your down payment was 30% and your loan 70%, you'd lose at most the down payment, while the bank would lose the 70% loan—the developer is insolvent, and the property likely won't be auctioned in the short term, so that loss is essentially final.
Another advantage of taking a loan is that mortgage buyers are generally considered to have paid the full purchase price. Legal provisions involving judicial enforcement and homeowner priority rights typically require protecting buyers who have paid the majority or all of the purchase price—those paying in installments don't enjoy this same benefit.
Although current mortgage interest rates are high, the repayment period is long, and when inflation is taken into account, borrowing remains worthwhile. The key thing to watch is not borrowing beyond your repayment capacity. For instance, if your monthly income is 5,000 yuan but you take on a 5,000-yuan monthly payment, losing your job would make survival extremely difficult!