The Annuitätendarlehen is the standard German mortgage. You pay a flat monthly amount throughout the Zinsbindung — but what that payment is made of shifts over time.
How It Works
Inside the flat monthly payment, the interest portion declines as the loan balance falls, and the principal (Tilgung) portion grows. The total stays the same; the split changes. Early years are interest-heavy, which is tax-relevant because mortgage interest on a rental property is generally deductible.
Key Points
- Flat monthly payment for the whole fixed-interest period
- Interest share falls, principal share rises, as the balance shrinks
- The interest-heavy early years maximise the deductible interest on a rental property