How does a repayment loan work?
Repayment rate increases
The financing of your own four walls is not only covered with your own capital, but mostly through a so-called annuity loan (e.g. a mortgage loan or a real estate loan). The customer pays for his loan monthly o. Quarterly agreed payments, which consist of an interest rate and a repayment component. Overall, the percentage interest rate (generally calculated on the remaining debt) decreases over the years, while the repayment rate increases. Alternatively, there is the possibility of suspension of repayment. With this model, the builder / property owner does not pay a repayment portion during the term of the loan, but must therefore consistently pay the interest on the entire loan amount. At the end of the term, the loan is then fully repaid or redeemed.
Combi solution: Repayment suspension loan plus building society contract
The repayment suspension loan can be ideally B. use in combination with a home savings contract. The home savings contract can be calculated with a suitable home savings sum and a suitable allocation date so that there is little financial risk. If the building society contract is ready for allocation, the repayment suspension loan can be replaced with a cheap building society loan. The highlight: With this variant, the borrower saves potentially cash money compared to the classic annuity loan, as our example shows.
In our example, the result of the redemption suspension loan and home loan savings contract combination is around 2,889 USD cheaper than the comparable annuity loan. In both cases, a loan of USD 50,000 was taken out for real estate financing. After ten years, the repayment-free loan will be replaced by the home loan. The monthly charge for this variant is USD 324, for the annuity loan USD 337 a little more.
Overall, the sample customer for the estate model only has to pay 27,932 USD in interest. however, the classic real estate finance costs around 30,861 USD. The cause of the attractive savings lies in the lower interest rates, often allow building societies to their customers for the interest-only advance loan and savings agreement. Worth knowing: In our comparison, the (forecast) full repayment takes almost the same length for both variants.
Taking ideal conditions into account, the repayment-free loan plus home loan contract can be a cheap alternative to the annuity loan. To find the right provider, an online comparison and a direct request with individual data are recommended.