Loan calculator – calculate the installment loan for the annuity loan

With our loan calculator you have the opportunity to calculate all the important details of an annuity loan. Find out what your monthly costs will be for the amount you want to borrow and how much you will pay back in total at the end of the term.

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Two out of three German citizens choose the annuity loan as a form of loan for the purchase of real estate. The advantage is obvious: the loan is returned to the lender over the entire term with constant payments.

The repayment amounts, called installments, are usually paid back by borrowers on a monthly basis. Each monthly installment consists of two elements:

Over time, the remaining debt decreases, so that the share of interest payment in the installment payment also decreases.

Control and planning security thanks to the loan calculator

Money Picture

The annuity loan is not the most popular form of real estate financing for nothing. Home builders and real estate buyers have the security of paying the same installment, the annuity, every month for a contractually fixed period of time. This monthly rate gives them a high degree of planning security in financing their dream property. At the same time, the monthly installment brings a high degree of control, as consumers can plan ahead.

In principle, the annuity loan is suitable for all borrowers, especially those who do not want to take any risk in the realization of their dream home. Families in particular, with the future of their children at stake, belong to this group.

With our loan calculator, borrowers can calculate the monthly installment for their annuity loan and thus plan and manage their finances accordingly. The loan calculator gives them security and helps them to fulfill the dream of home ownership – month by month, euro by euro.

Matching budget and repayment rate

The biggest influence on the future of real estate buyers and home builders is the initial repayment rate. It determines how quickly borrowers pay off the loan and how high their monthly installment will be.

Assume that the initial repayment rate is three instead of two percent for a loan in the amount of 200.000 euros. In this case, the monthly payment would rise from around 640 to 800 euros.

For many families, the difference of 160 euros makes a big difference. Therefore, they must calculate their budget to the last cent and take into account all possible factors:

In addition, there are costs that can be planned, for example, for the education of children. Families should calculate this as accurately as possible. With the unforeseen costs, they must plan for a sufficient cushion. It is also helpful to have insurance that will step in and help pay off the loan in the worst case scenario.

Notes on the choice of annuity loan

Most banks sell annuity contracts with a term of around ten years and a relatively low initial repayment rate. Since the personal contribution of most German citizens is not large, they can not repay a real estate financing in this time. They usually need 30 years to finance the dream of home ownership. They finance the remaining sum via so-called follow-up financing.

For this reason, it is important to use the annuity loan with as long a term as possible – at best 15 years. According to German law, the customer has the option to terminate his loan agreement after ten years (§ 489 para. 1 no. 2 BGB). He has five years left to wait for a favorable interest rate.

In times of low interest rates, choose a high initial repayment rate of two to three percent. Although real estate buyers pay more, but their total term of the real estate loan decreases. This has a positive effect on the interest costs, so that the financing is cheaper overall.

Example calculation for an annuity loan

The Mustermann family plans to pay 100.000 euros in financing. The term is 25 years. In the first 15 years, the effective interest rate is 5.01 percent. This will result in a monthly installment of about 623 euros. After 15 years, the Mustermann family still owes the lender about 43.000 euros.

With other products, such as a home savings product, the remaining debt would be around 17.000 euros would have been higher. The reason: home builders and real estate buyers first pay the interest on home savings contracts.

With the annuity loan, consider the follow-up financing

Many builders calculate with the loan calculator, like the Mustermann family in the previous example, only the annuity loan, which usually has a short term. In the process, they forget to include follow-up financing in their calculation.

After the annuity loan has expired, most builders have not yet repaid their real estate financing. The remaining debt is financed with the follow-up financing. In order not to get into payment difficulties, consumers must take follow-up financing into account from the outset.

The simplest way to determine the best loan term and interest rate is with a cash comparison. Real estate buyers create a financial overview of all their financial income and expenses. What is left at the end of the month is the amount they can pay each month on their annuity loan. Don't forget: Plan a cushion for home repairs and other unforeseen events.

3 tips for choosing an annuity loan

When choosing an annuity loan, consider the following three tips to get the best possible result with our loan calculator:

  1. In times of low interest rates, choose terms that are as long as possible.
  2. In times of high interest rates, short terms help them.
  3. Create as much equity as possible.

Now determine all the necessary details you need for your annuity loan with our loan calculator.

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