Extra repayments (Sondertilgungen) are additional, voluntary payments on your property loan that directly reduce the outstanding balance. They are one of the most effective ways to cut the total interest burden and become debt-free faster. Our extra repayment calculator shows how strongly regular extra payments affect the term and interest costs.
How to Use This Calculator
The calculator compares your loan with and without annual extra repayments and presents the savings transparently. Here's how to proceed:
- Step 1: Enter the loan amount.
- Step 2: Enter the agreed interest rate.
- Step 3: Set the initial repayment rate, typically 1-3%.
- Step 4: Enter the planned annual extra repayment. Many banks allow 5-10% of the loan amount per year at no extra cost.
Understanding the Results
The results compare the two scenarios directly:
- Term Without Extra Repayment: The estimated total term until full repayment with the annuity alone.
- Term With Extra Repayment: The shortened term when you make additional annual extra repayments.
- Time Saved: The difference between the two terms in years.
- Total Interest Without Extra Repayment: The total interest cost over the full term without additional payments.
- Total Interest With Extra Repayment: The reduced interest cost from paying down the balance faster.
- Interest Saved: The absolute amount you save in interest through the extra repayments.
Why Extra Repayments Matter for Investors
Every extra repayment reduces the outstanding balance and therefore the basis for future interest. Since German annuity loans work on the principle that the majority of the payment consists of interest at the start, an early extra repayment delivers the greatest leverage. With a loan of 240,000 euros at 3.5% interest and 2% repayment, an annual extra repayment of 5,000 euros can shorten the term by several years and save five-figure interest costs. It is important to agree the extra repayment option in the loan contract, as otherwise unscheduled extra repayments may trigger an early repayment penalty. For investors, however, extra repayment competes with alternative investments: if the achievable return on other investments exceeds the loan interest rate, it may be more sensible to deploy the capital there.
Tips
- •Agree the extra repayment option already when signing the loan contract. 5-10% of the loan amount per year without an early repayment penalty is common.
- •Early extra repayments have a stronger effect than late ones, as the interest portion is highest at the start of the term.
- •Weigh whether the extra repayment or an alternative investment with a higher return is more advantageous. With low loan interest rates, an investment may pay off more than repayment.