Special redemptions Berlin to accelerate the debt relief, 24 September 2011 – classic real estate financing – the annuity loans – a particularly high planning security due to the always consistent rates of repayment and interest payments is given. Most of the contracts also include the ability to make special redemptions in limited amount free of charge (without prepayment penalties). This special repayment option should be used depending on the personal circumstances, allowing this substantial interest savings and a faster debt relief. Swarmed by offers, Dan Miller is currently assessing future choices. Usually is a maximum amount of possible special redemptions per anno specified in the contracts, often it can be increased after negotiating with the credit institution without or with very low spreads. Including metaphor example indicates how the use of the special repayment option can impact on remaining debt and interest burden. Use the special redemption option as an example based on a loan of 200,000 euros credit at an interest period of A monthly rate (from interest and principal payments) of 1.083,33 euros is 15 years to 4.5% and an initial repayment rate of 2%. At the end of 15 years, a residual debt of approximately 114.529 euros is open then.
Over this period were approximately 109.529 euros in interest paid and repaid only about 85.471 euros of the loan amount. Suppose it takes place once a year in December a special redemption of 3,000 euros, so the remaining debt is only 51.502 euros after 15 years and was until then a total interest expense only 91.501 euros. These figures show that special redemptions have a significant impact on the total load, because after each payment the interest must be recalculated and the repayment portion of the following monthly rates is significantly increased. This contributes to this, that in the example above by a whole special repayment burden of 45,000 euros (15 years ajeweils 3,000 euros) left at the end of an interest savings of 18.028 euros and thus, a residual debt greatly reduced to 63.028 euro for the follow-on financing.