Those who finance a house purchase or house building should know that high borrowing rates at the beginning of an annuity loan cause the repayment amount to increase more over time, as with loans with a lower interest rate.
A calculator for the interest rate commitment offers planning security
What is the debit interest?
Loans with low interest rates have, unlike loans with higher interest rates, a lower repayment and a lower interest portion.
Online calculation of debit interest
A debit calculator can help you make the right choice of the right fixed interest period for your mortgage lending. First, ask yourself how long you want to secure an interest rate, just for a few years or more? The online calculator allows you to compare different interest rates by comparing interest rates and at which interest rate you need to extend financing with a shorter borrowing rate commitment.
For a debit interest calculator, you can enter the amount for your funding of, for example, $ 200,000 and a desired initial repayment of, for example, two percent or, optionally, the amount of the installment. With the computer, you then record the duration of the debit interest commitment, for example, 10 (longer period) or 5 years (shorter period) or another period of your choosing. In the above example, the debit interest calculator calculates a monthly installment of 666.67 euros for a 2% repayment. The calculator will tell you from which interest rate after the end of the shorter fixed interest period it makes more sense for you to select the longer variant.
To calculate which of the two variants (longer-term or short-term) is the better one, the period is based on the duration of the longer binding. It is assumed that in the case of the variant with the shorter fixed interest period, a follow-up loan is concluded until the end of the longer borrowing rate commitment. At the end of the period a residual debt of the same amount remains for both variants. The result shows up to what interest rate the follow-up financing pays off the conclusion of a loan with a shorter debit interest rate commitment.
Comparison of short and long fixed interest periods
A client will wonder what he needs for his construction or home purchase nor a calculator for a debit interest calculation. In addition to the fixed interest rate, banks usually name the effective annual interest rate for their real estate financing offers. The shorter a fixed interest rate, the better the interest rates usually are. If the interest rate lock has then expired, an increase in interest rates will be noticeable, in contrast to a longer fixed interest rate. On the other hand, a long commitment, for example of fifteen years, has the advantage that the builder can expect a fixed size in his mortgage lending during this period, because the interest rates have been fixed.