Repayment substitute calculator

How does a loan with Tilgungsaussetzung (suspended repayment) work?

With Tilgungsaussetzung (suspended repayment) you pay the bank interest only and repay nothing. Instead you save every month into a Tilgungsersatz (repayment substitute), for example a fund savings plan, a Bausparvertrag (building society savings contract) or a life insurance policy. At the end of the fixed-rate period the saved capital is meant to pay off the loan amount.

Your monthly burden is the interest payment plus the savings contribution. The calculator shows that sum as the monthly payment, along with total interest, the balloon payment and the projected capital at the end of the fixed-rate period.

How do you calculate the capital saved in a repayment substitute?

With the savings plan formula: capital = contribution × ((1 + r)^n − 1) ÷ r. Here r is the monthly return (expected annual return ÷ 12) and n the number of months. A contribution of €679.12 at an expected return of 6% over 120 months gives €111,293.74.

The return is an assumption, not a promise. At 3% instead of 6%, the same contribution would only add up to about €94,900, which is less than the €100,000 debt.

The calculator does not include costs or taxes on the income of the savings product. So enter a return after costs.

Is suspended repayment worth it compared with normal repayment?

Only if the return on the savings product after costs and taxes is above the loan interest rate. Every euro repaid saves you the loan interest for certain. Every euro saved earns the return of the savings product, and with funds that is uncertain.

For rented property there is one more factor: loan interest is deductible as Werbungskosten (income-related expenses, § 9 Abs. 1 Satz 3 Nr. 1 EStG) and does not fall while repayment is suspended. In the example you pay €40,000 of interest over ten years instead of €35,458.37 for an annuity loan with 2% repayment.

If the capital falls short at the end, a gap remains that you have to refinance.