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Volltilger loan

Interest rate security until full repayment

The so-called Volltilger loan is one of the special real estate loans offered by some banks. The main characteristic of this real estate loan is that the term of the loan and the period until the loan is fully repaid are identical. At the end of the agreed term, there is therefore no residual debt, as is normally the case with normal real estate loans. Due to this fact, after the maturity of a Volltilger loan, follow-up financing is no longer necessary, as the loan is fully repaid at this point in time. Since the fixed interest rate in the full repayment loan is usually identical to the total term, there is no risk of interest rate changes for the borrower. Such a fixation is particularly useful in the current phase of low interest rates. Today, significantly more borrowers have the option of opting for such a loan than they did five or ten years ago.

You can find out whether this type of loan makes sense for you at a personal consultation from your Interhyp advisor.

How does a Volltilger loan work?

For which borrowers is a full repayment loan particularly useful?

Sample calculation for the monthly debit for the full repayment loan

What are the advantages of the Volltilger loan?

What are the disadvantages of the Volltilger loan?

Click here for the full repayment calculator

How does a Volltilger loan work?

In the case of a normal real estate loan, usually in the form of an annuity loan, the customer agrees an initial repayment with the bank - for example, in the amount of three percent. Together with the loan amount and the interest rate, this results in the monthly rate and also the term of the real estate loan. The full repayment loan works a little differently at the beginning, because in this case the term is first determined within which the loan is to be repaid in full. This then results in the repayment or the amount of the monthly installment. The shorter the term, the higher the monthly loan installment. At this point, customers should of course make sure that the financial burden is still bearable, even if the loan is to be repaid as soon as possible.

Typical terms for a full repayment loan range between 10 and 20 years. A fixed interest rate is usually agreed within this period. Whether additional special repayments are possible during the term must be negotiated individually with the respective lender. In most cases, however, the banks require a prepayment penalty during the fixed interest period if the entire remaining amount or part of the remaining debt is to be repaid early. Of course, the loan interest agreed with the bank also has a major influence on the speed of repayment.

For which borrowers is a full repayment loan particularly useful?

The Volltilger loan is particularly suitable for the following borrowers and can therefore be more useful than an ordinary annuity loan, where the total term and duration of the fixed interest rate differ from one another:

  • Borrowers who want to pay off their debts faster than average
  • Borrowers for whom interest rate security is very important and who do not want the risk of interest rate changes
  • Loan seekers who want an unchanged rate for the entire term
  • Customers for whom a high level of calculation security is particularly important

If you take a closer look at these borrowers, it is often single people or families with a relatively high and secure income who take advantage of a full repayment loan. These customers can afford a fairly high monthly rate and pay back the loan comparatively quickly.

Sample calculation for the monthly debit for the full repayment loan

Before taking out a full repayment loan, it makes sense to deal with sample figures in order to calculate your own monthly rate. This makes it easier to estimate whether you could afford this in the long term. You can therefore take the various key data of a possible full repayment loan from the following example:

  • Loan amount: 180,000 euros
  • Duration: 20 years
  • Repayment rate: 5%
  • Interest rate: 1.5%
  • Monthly rate: 975 euros

In this case, you could repay the loan of 180,000 euros in full in 20 years with a repayment of five percent and an interest rate of 1.5 percent. For this you would have to be able to raise almost 1,000 euros in monthly loan installments.

Another example:

If you want to fully repay a loan of 300,000 euros in ten years, you have to pay a monthly rate of around 2,600 euros. If the full eraser is to be repaid after 15 years, it is still a good 1,800 euros. If the Volltilger runs for twenty years, the property buyer only has to transfer around 1,400 euros per month to the bank. For comparison: With a conventional loan with the same rate of 1,400 euros and a fixed interest rate for fifteen years, at the end of the first fixed interest rate in fifteen years there is still a residual debt of around 80,000 euros, which would then have to be financed at the market interest rate. In the full repayment variant for twenty years, the borrower pays five years longer, but at fixed rates of 1,400 euros per month. Because the interest on the Volltilger loan is so cheap, the total interest cost is also relatively low. With the twenty-year Volltilger loan, you can achieve a lot of security for a comparatively low monthly rate.

What are the advantages of the Volltilger loan?

The Volltilger loan has a number of advantages:

  • Fixed interest rates over the entire term
  • No interest rate risk
  • High planning security
  • Fast debt repayment
  • Often interest discounts through quick repayment
  • Follow-up financing is no longer necessary

You should also keep an eye on the possible interest rate discounts: Due to the fact that Volltiger loans are repaid relatively quickly, the default risk of the lending bank is also reduced. Therefore, quite a few banks are willing to offer interest discounts of 0.15 to 0.35 percent compared to the standard conditions for classic annuity loans.

What are the disadvantages of the Volltilger loan?

Before you decide on a Volltilger loan, in addition to the advantages mentioned, you should also know and consider the disadvantages. The main ones to be mentioned here are:

  • No change of bank possible, for example with better conditions
  • In the event of payment default and suspension of installments, high compensation is due
  • Often no special repayments are possible - if they are, they are relatively expensive
  • Little flexibility, as rates usually cannot be changed

Ultimately, you should compare the advantages and disadvantages mentioned in order to then decide whether the Volltiger loan is the right real estate loan for you. The specialists at Interhyp will be happy to advise you personally at over 100 locations in Germany and find your tailor-made home loan from the range of 500 banks.

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