Positive impact of unscheduled mortgage loans

A real estate financing is usually for the long term. Pass until full repayment of the original loan amount, often up to 30 years. During the term, there are several periods for fixed-rate period, which shall then be drawn up for a period of years, eg 10 years. A switch to another financial institution with more favorable seller conditions is usually possible at the end of such a fixed-rate period.

An instrument to accelerate the debt is unscheduled. Even when signing a mortgage loan should be paid to the right of unscheduled. Some banks offer their customers on contracts made with the possibility of unscheduled, in others, customers have to specifically ask for it.

But what exactly means the unscheduled?
The unscheduled allows the borrower to provide annually up to a specified maximum sum additional principal payments and thus reduce the outstanding balance.



With a loan amount of 200,000 € and a special repayment ability of the 5% would be up to 10,000 € per year. Although at the beginning of house construction, the budget is completely scheduled, the option to pay special repayments. If they can not later use, no damage. The agreement runs with the agreed terms of repayment and interest from as agreed. However, there is the possibility of one or more unscheduled actually paid into the loan agreement, which leads to substantial interest savings. By an unscheduled shifts the monthly annuity for the benefit of the principal and to the detriment of the interest. In plain language this means, you must immediately pay a portion of his house and skipped a few months of the term until the end of repayment. Thus, the total interest burden of the loan will be considerably mitigated. The earlier a special repayment can be made, the higher the interest savings achieved.

If one does not pay special repayments can be made during the fixed-rate offers is the end of such Interest Period, the possibility of an unscheduled. The financial connection then extends over a smaller sum, and we thus significantly smaller in the monthly burden. The borrower should not shy away from switching to another institution if the conditions for the next fixed-rate period is not sufficiently attractive. Many builders have few thoughts about the total sum of accruing interest. Save on a daily or fixed deposit accounts. This is not a good idea, because the return could be greater. For term deposits are currently (as of 2011) to achieve approximately 2.5% credit interest. The proposed special repayment of a mortgage but with the mortgage interest rate impact. Which is usually about 4% or 5%. The actual effect is unfortunately only at the end of the funding to actually feel. During the period he has to calculate only.

Repayments are useful but only up to the contractually specified amount, and unscheduled repayments in addition to the will of the bank are meaningless. They then usually demand an interest rate compensation in the amount of savings.