Annuity payment (anuitní splátka)
The specific monthly amount you send the bank under annuity repayment. It is calculated with the formula M = P · i / (1 − (1 + i)^−n), where P is the outstanding principal, i the monthly interest rate and n the number of months remaining. It stays the same throughout the fixed-rate period. The bank recalculates it when the rate changes, after an extra repayment or when the term is altered.
Example
Take a loan of CZK 3,000,000 over 25 years at 5.00 %. The monthly rate is i = 0.05 / 12, n = 300, and the annuity payment works out at CZK 17,538. Over 30 years it drops to CZK 16,105. Saving CZK 1,433 a month, however, costs roughly CZK 536,000 more in interest over the life of the loan.
In practice
The annuity payment in a bank's offer holds only for that fixed-rate period. When it ends, the bank recalculates the payment from the outstanding principal and the new rate, so it can rise by thousands of koruna. Test your budget against a higher rate as well: on CZK 4,000,000 over 25 years at 6.00 %, the payment would be CZK 25,772 instead of CZK 23,384. Our mortgage calculator does the sum for you.
How it differs
A monthly payment is the broader term, since the bank sometimes adds payment protection insurance or an account fee to it. The annuity payment contains only interest and principal. What separates it from the annuity is a nuance: the annuity is the principle, the annuity payment the actual amount in koruna.
Related terms
In-depth guide
Calculate your own situation
Instead of abstract definitions — enter your own parameters and see the result for yourself. No registration, no form, no salespeople.