Tilgungshöhe

Tilgungshöhe refers to the amount of principal paid off with each installment of a loan. In the context of mortgage or installment loans, each payment typically consists of two parts: the interest payment and the principal repayment, also known as Tilgung. The Tilgungshöhe is the portion of the payment that directly reduces the outstanding loan balance.

Over the life of a loan, the Tilgungshöhe generally increases with each subsequent payment, assuming a standard amortization schedule. This is because the interest portion of the payment decreases as the principal balance decreases. As less interest accrues, a larger portion of the fixed or variable payment is allocated to reducing the remaining debt. This increasing Tilgungshöhe accelerates the repayment of the loan over time.

The initial Tilgungshöhe is often lower than later installments, especially in the early years of a long-term loan. Lenders calculate the Tilgungshöhe based on the loan amount, interest rate, and loan term. Borrowers may sometimes have the option to make additional payments above the scheduled amount, which directly increases the Tilgungshöhe for that period and can significantly shorten the loan term and reduce the total interest paid. Understanding the Tilgungshöhe is crucial for borrowers to manage their debt effectively and plan their financial commitments.