Repayment Home LoanUncategorized
Repayment of the home loan
One part flows into the interest payment, the other part into the amortization. This is a combination of an annual repayment of capital and the payment of interest by a constant pension. In principle: Over time, the repayment portion of a loan increases, while the interest rate decreases. Unlike the other forms of home loan, you do not pay back the loan amount for a bullet loan.
Repayment of home loans with increasing investment. Due to mortgages, special repayments, construction financing)
If the inflation rate were really bigger in the long term, a quick payback would not make sense. You also have very good interest rates, no incentive to pay off faster. However, we currently have quotas below 1 percent and only when the economy is back on the upswing will significantly higher quotas be expected.
They are also protected from that, because then interest rates will go up to prevent inflation, and I would just consider the 4% repayment. If you continue this annual special repayment, you would have repaid the loan earlier than in 15 years, even at 0% other regular repayments.
Also, the repayment rate of 4 percent (instead of 1 percent) forces you to pay this higher pension. You give up the financial headroom without necessity, which you would have with the special repayments (max 5% / year, as I assume) with 1, 2 or 3 regular repayments. Inflation: If your gross profit only increases with inflation, you have – “thanks to” our advanced tax rate – a net worth below inflation.
Your financial scope, which is based on your annual surplus, therefore decreases.
For that very reason, in my opinion, it would not be appropriate to make the higher 4% repayment rate mandatory but to use the one percentage rate with the annual maximum repayment installments for unscheduled repayments.
For house financing more interest than amortization? Settlements (house, loans, financing)
Hello, I would like to co-finance a house for about 300000 EUR (notary and everything). I have already tried the mortgage calculators on the net and wherever I pay more interest per month than the loan itself. Sb. Mtl interest rate 1200 then 700 interest rate and the remaining part is having. It can not be that so many people pay for a building and realize that they have to pay so much interest.
You pay a constant monthly installment (the so-called annuity). The installment payment consists of interest and a repayment share. Therefore, if you start with repayment of 1 or 2 percent, it is often the reason that the interest offered by your house bank is higher than 1 or 2 percent and that at the beginning of the payment the interest cost of your installment is higher than the repayment portion.
The repayment of the loan is made monthly and the interest expense of the installment decreases, while the repayment share steadily increases due to the savings in interest. Many people who buy a holiday home pay interest payments until retirement. Currently, interest rates are low, but real estate prices are very high.
Besides, there will be a time when interest rates are very high and real estate prices are very low. You may need to pay a very high interest in ten years when follow-up financing comes. With such a large amount of money, you pay a lot of interest. Because very few people can spend more than 1000 EUR per day, interest rates are above repayment.