Glossary
Annuität
Annuität: Annuität (German for annuity) is the fixed total instalment on an Annuitätendarlehen (annuity loan), made up of an interest portion and a principal repayment portion. As you pay the loan down, the interest share of each instalment falls and the repayment share rises, while the total instalment stays the same.
What is Annuität (annuity)?
Annuität is German for annuity, the constant yearly or monthly instalment that borrowers pay on a classic Annuitätendarlehen (annuity loan). The word comes from the Latin annus (year) and captures the core idea: the total instalment stays constant for the whole fixed-interest period, whether on the first or the last day of the term.
Every Annuität has two parts, an interest portion and a repayment portion. Because interest is charged only on the outstanding balance, the interest portion falls with each instalment you pay. Since the total instalment stays the same, the repayment portion rises by the same amount. So the loan is paid down slowly at first and faster towards the end.
The Annuitätendarlehen is the most widely used form of property financing in Germany. It gives you planning certainty because the monthly payment is fixed for the whole fixed-interest period (Sollzinsbindung). Once that period ends, the remaining balance is renegotiated or carried on through follow-up financing (Anschlussfinanzierung).
Calculating the Annuität: an example
Starting figures: loan amount €300,000, nominal interest 3.7% p.a., initial repayment 2.0% p.a.
Monthly Annuität: (3.7% + 2.0%) / 12 × €300,000 = €1,425
The split between interest and repayment shifts noticeably over time:
| Year | Remaining balance (start) | Interest portion/month | Repayment portion/month |
|---|---|---|---|
| 1 | €300,000 | €925 | €500 |
| 5 | €271,800 | €838 | €587 |
| 10 | €236,500 | €729 | €696 |
| 15 | €193,800 | €597 | €828 |
| 20 | €141,900 | €438 | €987 |
After 20 years (the end of a typical fixed-interest period), a balance of around €141,900 remains. It is then either paid off in full or carried on through follow-up financing at the interest rates in force at that time.
Good to know
- Interest rate and repayment set the term: At the same interest rate, raising the initial repayment from 1% to 2% shortens the total term of a typical loan by roughly 10 to 15 years.
- Watch current rates: For 10-year fixed-interest periods, nominal rates in early 2026 sit between 3.4% and 4.2%, depending on equity and creditworthiness. This rate applies for the whole fixed period and largely sets the size of the Annuität.
- Use special repayments: Most loan contracts allow annual special repayments (Sondertilgungen, often 5% of the loan amount). Each one lowers the balance and the future interest cost without changing the Annuität.
- Ask for a repayment schedule: Every bank must hand over a full repayment schedule (Tilgungsplan) showing all annuities, interest portions and remaining balances. That lets you track how the balance develops up to the end of the fixed period.
Legal basis
Property financing in Germany is regulated as consumer loan agreements under §§ 488 ff. BGB (the German Civil Code). § 491 BGB distinguishes general consumer loan agreements from real estate consumer loan agreements (Immobiliar-Verbraucherdarlehensverträge), which carry stricter information requirements. Under Art. 247 EGBGB (the Introductory Act to the Civil Code), lenders must give the borrower a representative repayment schedule before signing, setting out the Annuität, the interest portion, the repayment portion and the remaining balance for each payment period.
Frequently asked questions
Annuität is German for annuity, the constant monthly instalment a borrower pays on an Annuitätendarlehen (annuity loan). It combines an interest portion and a principal repayment portion. Over the term the total instalment stays the same, but the interest portion keeps falling while the repayment portion rises.
The annuity follows the formula: Annuität = loan amount × (i × (1 + i)^n) / ((1 + i)^n − 1), where i is the monthly interest rate and n the term in months. In practice you just enter the loan amount, the interest rate and the initial repayment rate, then let a calculator work out the monthly payment.
Initial repayment rates (anfängliche Tilgung) usually run between 1% and 3% per year. A higher initial repayment shortens the total term considerably and lowers the overall interest cost. On a €300,000 loan at 3.7% nominal interest, 1% more repayment makes a difference of several years.
An Annuitätendarlehen (annuity loan) is a mortgage with equal instalments throughout the fixed-interest period. It is the most common form of home financing in Germany because the monthly payment is fixed for the whole Sollzinsbindung (fixed-interest period), which keeps budgeting predictable. When that period ends, the remaining balance is either paid off or rolled into follow-up financing.