# Debit interest commitment calculator

## A calculator for the borrowing rate provides planning certainty

### What is the fixed debit interest rate?

If you are financing a house purchase or construction, you should know that high debit interest rates at the beginning of an annuity loan lead to a higher increase in the repayment amount over time, as is the case with loans with a lower interest rate. Loans with low interest rates have, in contrast to loans with higher interest rates, a lower repayment and a lower interest portion.

### Online calculation of the borrowing rate

A fixed interest rate calculator can help you make the right choice of the right fixed interest rate period for your construction financing. First ask yourself how long you want to secure an interest rate, for just a few years or longer? The online calculator allows you to compare the interest rates different interest rate lock-ins and at what interest rate you have to extend a financing with shorter debit interest rate lock-ins. With a debit interest commitment calculator, you can calculate the amount for your financing in the amount of, for example, 200.000.00 euros and a desired initial repayment of, for example, two percent or optionally enter the amount of the installment. In the calculator, you then enter the duration of the fixed-interest period of, for example, 10 years (longer period) or 5 years (shorter period) or any other period you specify. In the above example, the calculator calculates a monthly rate of 666.67 euros for a two-percent repayment. The calculator determines the interest rate at which it would make more sense for you to choose the longer option after the end of the shorter fixed-interest period.

In order to calculate which of the two variants (longer-term or short-term) is the better one, the term of the longer commitment is used as the basis for the time period. It is assumed that in the case of the variant with the shorter fixed-interest period, a follow-up loan will be taken out until the end of the longer fixed-interest period. At the end of the period remains with both variants a residual debt in identical amount. The result shows the interest rate up to which it is worthwhile to take out a loan with a shorter fixed-interest period for follow-up financing.

### Comparison of short and long fixed interest periods

A builder will wonder why they still need a calculator for a borrowing rate calculation for their construction or home purchase. In addition to the fixed interest rate, banks usually quote the APR in their real estate financing offers. The shorter a fixed interest rate is, the more favorable the interest rates usually are. When the fixed interest rate then expires, an increase in interest rates is clearly noticeable, in contrast to a longer fixed interest rate period. In contrast, a long commitment, such as fifteen years, has the advantage that the builder can count on a fixed size in his construction financing during this period, because the interest rates have been agreed to be fixed.