Annuity (Annuität)

The term annuity means a regular payment. It comes from the Latin "annus", the year. It can also be described as an instalment that is paid consistently over a loan term. This instalment usually consists of an interest portion and a repayment portion. Both portions change over the years, but the amount to be paid remains the same. The interest portion will continue to decrease, the repayment portion will increase. So-called annuity loans are usually the basis of a corresponding construction financing.