Anyone thinking about a real estate loan will not be able to avoid the terms annuity loan, mortgage loan and suspension amortization loan. A repayment suspension loan is also known as a TA loan. But what is this actually about?
Characteristics of a TA loan
The so-called TA loan is often selected precisely in the financing of real estate and is the opposite of the ordinary loan. Here, the repayment portion is not paid off continuously but only at the end of the loan's term. The borrower pays interest to the bank monthly or quarterly. Since the repayment portion remains the same, the interest rate is also always the same.
Features of an annuity loan
In the case of an annuity loan, the loan is repaid by the borrower throughout the agreed term. This means that with the repayment of the respective credit installment a corresponding interest as well as a corresponding repayment portion is redeemed. Thus, the entire amount of a real estate loan is paid off continuously. This is also the most common variant of a loan.
Features of a mortgage loan
This loan is an annuity loan in which one's own property is used as collateral for the bank. Thus, the bank retains the right to repay the loan by realizing the property serving as collateral. This happens when the loan installments are not paid by the borrower. A mortgage loan is a common type of loan in real estate financing. Because in this way the bank has a security that the loan is really paid off. On the other hand, this usually means lower interest rates for the borrower compared to an ordinary annuity loan.
When does a loan with deferred repayment make sense??
At first glance, this type of loan does not necessarily seem to make sense. But this is not always the case. This is because the repayment rate is often paid out after the agreed term through a saved life insurance sum, an inheritance o.a. After all, a real estate loan is paid off for a very long time.
Repayment suspension loan with a building savings contract
A TA loan with a building savings contract is very popular. In this case, a loan with a suspension of repayment is used in combination with a building savings contract. If the building savings contract is calculated with a suitable amount of savings and a suitable date of allocation, there is no financial risk. As soon as the building savings contract is ready for allocation, the repayment rate can be replaced by a building savings loan. If the combination of a repayment suspension loan with a building savings contract is selected, it is even possible to save money in contrast to the annuity loan. This is because with a combination of TA loan and building savings contract, borrowers are usually granted lower interest rates by the building societies, so that less interest has to be paid and thus money can be saved. Thus, this variant is sometimes even an excellent alternative to the annuity loan.
A loan with a suspension of repayment means repaying only after the term of the loan has expired and the interest has been paid off. Although people want to have their loan paid off as quickly as possible and therefore usually opt for an annuity loan. but a TA loan has its advantages over other loans. If it is combined with a building savings contract, money can even be saved, as the interest to be paid is usually more with an annuity loan.