Money & WorkHow it works

How a loan payment that never changes actually works.

With an annuity loan you pay the same instalment every month, but its composition shifts. On €200,000 at 4% interest and 2% repayment that's €1,000 a month: at first €667 goes to interest and only €333 reduces the debt. As the balance falls, interest shrinks and the repayment share grows automatically. The end arrives faster than the start suggests.

Useful: Extra repayments early in the term save the most interest.

Source: de.wikipedia.org

ImmobilienKredit Zinsen

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