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The correct repayment amount depends on the interest rate and age

How high the repayment rate should be depends on the period in which you want to pay off the loan. As a rule, this should be the case at the latest when you retire. So that mortgage customers are debt-free in old age, they have to adjust the repayment to their age or the term of the loan.

The shorter the time to retirement, the higher the repayment should be. Anyone who is 25 today and wants to be debt-free at 65 has lower monthly burdens than a 45-year-old who takes out a loan of the same amount and also does not want to have any more debts at 65. Our graph shows this for an interest rate of 1.3 percent.

The lower the interest, the higher the repayment should be

Important when choosing the repayment amount: the lower the interest, the longer it will take you with a certain initial repayment to repay the loan. With an interest rate of 5 percent and an initial repayment of 2 percent, it takes about 25 years to repay a loan. With an interest rate of 3 percent you need about 30 years with the same repayment rate and almost 40 years with an interest rate of 1.3 percent.

Why is that?

The reason for this lies in the constant loan installment to settle your annuity loan, which consists of interest and repayment. With the regular repayment of your loan, the remaining debt decreases more and more during the term. This reduces the interest component of the rate. Since the rate remains constant overall, the repayment portion increases continuously due to the saved interest portion. At low interest rates, the interest component is reduced more slowly - and thus the repayment component also rises more slowly than at higher interest rates. The logical consequence: With the same initial repayment, you will need longer to repay the loan.

Repayment rates at different interest rates

You can see from the following table which repayment rates are necessary for different interest rate levels in order to be debt-free within a certain period of time:

Required initial repayment at an interest rate of

For example, if you are 35 years old today and want to retire at 65, you should choose a repayment rate of around three percent p.a. at an interest rate of 1.3 percent

Calculate individual repayment

Good advice to you

Your mortgage loan with interest and repayment should match your needs and ideas as precisely as possible at the time you are free of debt. Our building finance experts are familiar with all aspects of real estate financing and will advise you personally and individually so that you can choose the right repayment amount at the current interest rate.

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