TilgungsPilot
What Is Tilgung? German Mortgage Repayment, Explained
Tilgung is the German word for principal repayment — the part of your monthly mortgage payment that actually pays down your debt (the rest is interest). It's the single most important term to understand when financing property in Germany.
What Is Tilgung? German Mortgage Repayment, Explained – calculate for free →A worked example
Loan €300,000, interest rate 3.8%, initial repayment rate (anfängliche Tilgung) 2%: your monthly payment is €1,450. In month one, €950 of that is interest and only €500 repays the loan. Because every repayment shrinks the balance, the interest share falls each month and the repayment share grows automatically.
The German mortgage glossary
- Tilgung — principal repayment
- Anfängliche Tilgung — the initial repayment rate (typically 2%–3% per year); together with the interest rate it sets your monthly payment
- Sondertilgung — extra repayments on top of the regular payment, usually allowed up to 5% of the loan per year free of charge
- Tilgungsplan — the amortization schedule: month-by-month interest, repayment and remaining balance
- Annuität — the constant total payment (interest + repayment) of a German annuity loan
Frequently asked questions
What does Tilgung mean in English?
Principal repayment. It is the portion of your monthly mortgage payment that reduces the outstanding loan, as opposed to the interest portion.
What is Sondertilgung?
An extra, optional repayment on top of your regular monthly payment. Most German lenders allow up to 5% of the original loan per year free of charge — it shortens the term and saves interest.