What's a mortgage?

1. Consultation: Find out from your client advisor about all the ins and outs of buying real estate.
2. Credit agreement: The credit agreement is signed after the financing proposal has been prepared.
3. Real estate purchase, mortgage note as security: You now sign the purchase agreement and become the owner of your dream property. The real estate serves as the bank's collateral.
4. Mortgage payout: The bank pays out the mortgage amount in accordance with the purchase agreement.
5. Mortgage interest & repayments: From now on you pay mortgage interest to the bank and settle your mortgage through repayments.
   

Repaying a portion of your mortgage on a regular basis over a defined period of time is called “amortization.” Generally, you must repay the second mortgage within 15 years or by the age of retirement – whichever comes first.

Direct amortization

In the case of direct amortization, your debt is reduced on a regular basis – normally every quarter – by a fixed amount. As a result, the outstanding amount and interest burden are reduced over time.

Indirect amortization

In the case of indirect amortization, the debt remains unchanged. As homeowner, you repay the amortization amount, for example, into a 3a retirement solution, which is pledged as security to the bank. This allows you to build up your pension savings. At the latest, the capital is paid out when you retire, and the mortgage is paid back by this amount.