Loan Calculator for Annuity Loans
The annuity loan with fixed rate fixation is the most popular form of real estate financing for owner-occupied real estate in Germany. One of the most popular models is the annuity loan. The loan calculator allows you to calculate the installment amount, the term or the initial repayment, taking into account interest rate, discount and special repayment. Free online pension calculator for calculating the rates of annuity loans. The loan calculator on this website may be used, among other things, to calculate interest and repay principal, repayable loans or annuity loans.
One of the most popular variants is the annuity loan.
The mortgage calculator allows you to calculate the monthly rate of annuity loans granted by various banks and brokers based on current working week conditions. You can make all the important settings for an annuity loan – from the first repayment to the interest rate, the mortgage lending period to the desired rate.
You can calculate the total cost and monthly installments of an annuity loan.
Using both the mortgage calculator and the following reconciliation: An annuity loan? An annuity loan is a form of loan for real estate financing whose monthly or annual interest and principal is consistent over the life of the contract or over the term of the interest commitment.
As part of regular installment payments, the interest and redemption portion will be deferred over the life of the loan (see following presentation). Annuity loans are the standard form of mortgage credit in the Federal Republic. The peculiarity of an annuity loan is its constant interest rates, the so-called bond. The loan is subject to interest and principal from the beginning.
This form of loan has the great advantage for the borrower that he can constantly calculate his financial burdens. Is a pension a pension? The term “pension” comes from the economy and designates the word for year. In the economy this means a total amount of disbursements, which consists of a part for the interest and a part for the repayment.
The annuity rate is therefore the rate in which a pension can be divided. Most loans are repaid in monthly installments, so the pension usually consists of twelve monthly installments. The annual fee can be calculated using the following calculation formula: The calculation of the monthly pension is somewhat more complex: For our example calculation, we use an annuity loan of EUR 200,000 at 2.40 percentage points per year and a term in the year.
This is due to the fact that part of the loan will be repaid with each installment during the year and the residual debt remaining in the following month will be reduced.
How an Annuity Loan Works Interest rates for the fixed interest period are fixed. With each installment payment by a borrower, the borrower repays part of his debt.
After each partial payment, the interest amounts are recalculated on the basis of the remaining debts. The recipe makes it clear how the interest and redemption portions change over time. Because the interest part of the monthly rate is always calculated from the remaining debt. This is getting smaller and smaller, and so is the interest expense on the monthly installments.
Because the borrower always wants to forward the same amount of money to his bank, the logical consequence is that the repayment portion of the annuity loan rises slightly with each installment payment. Our mortgage credit comparison illustrates how interest rates on mortgage loans are currently developing. The interest rate development chart shows interest rate developments in the real estate sector in the past: For whom are annuity loans suitable?
Annuity loans are often used to finance real estate. The annuity loan is also the default loan form for those who need a constant installment amount for long-term calculations.
How is the annuity loan different from other bonds?
In addition to the annuity loans, you also know the repayment and term loan.
In the case of a repayable loan, the borrower pays a fixed repayment installment plus default interest, which is repeatedly calculated for the remaining debt and added to the repayment portion. At the end of the contract period, the bullet loan is repaid in one amount. The interest expense is initially the largest, but decreases with increasing repayment.
This means for the borrower that he has to pay a significantly higher interest rate at the beginning of the term, but this is reduced to a minimum towards the end of the repayment term. For those who are in the initial phase in the situation, for example, in the financing of real estate to achieve a higher interest rate, and want to reduce the burden in the coming years, this form of credit is of interest.
The difference to annuity loans is therefore obvious: in the case of repayment loans, the borrower amortises at the start of the term very much per started year, but towards the end of the term, less and less. For annuity loans, the installment amount is the same over the entire duration. In the case of maturity loans, only the interest payments are deducted over a certain period, but the loan amount is not affected at that time.
The loan amount is paid out in a single value at the end of the contract period. In most cases, the repayment of the loan amount for the final loan volume is saved separately, eg via a life insurance or a building loan contract, which are then allocated. This has the disadvantage that you only have to take a small monthly burden, as only interest is paid.
However, you do not have to take out endowment policies or home loan savings contracts that have already been purchased at an advanced stage, or at the same time have to raise equity at the end of your term of office. An annuity loan has the following advantages over other forms of credit: A previously increased (constant) speed over the entire duration, so that the load is always consistently high.
Although the borrower repays the repayment loan from the beginning, the installment increases significantly by the interest expense still to be incurred. This loan is of interest to those who can afford a large monthly fee and “reward” themselves with falling rates. If you can only record a very small installment amount but have already saved elsewhere, the term loan may be the most interesting option for you.
Because each mortgage should be tailored individually, it is advisable to consult a specialist when planning your financing.