For mortgages, you may see annuity, degressive or progressive repayments. Czech banks offer only one option, the annuity payment. In this case, the amount of the monthly mortgage payment is the same for the entire term of the chosen fixation. You can easily calculate the total amount of the monthly instalment in our online mortgage calculator.
Principal and interest
Each instalment consists of principal and interest. The repayment schedule shows how much of each instalment is principal and how much you will pay in interest. For the first instalment, most of the payment goes towards interest. With each subsequent instalment, the amount paid in interest gradually decreases. In the case of principal, the opposite is true – with each subsequent payment, the amount going towards principal increases.
Easy financial planning
Although there are other types of repayment (note: mainly degressive and progressive), Czech banks practically do not offer them. Czechs like security and a constant mortgage payment amount allows them to better plan their finances.