How repayment rates affect your monthly EMI's |

[@DanielLic-i2c]

In case at the end of every year, we always have an extra money from annual bonus (which the amounts are vary) and use it to pay as a lumpsum payment (which makes our positive rental income become minus). Are lumpsum payments in this case also taken into account so that we can get tax benefits?

[@gharingermany]

No. On the contrary. The lump sum payment decreases your loan amount, and subsequently also the interest you pay. Hence the taxable income will increase , which in turn means that you need to pay higher taxes OR don’t get as much back. This is for rental apartments. So from tax perspective, this doesn’t make (financial) sense. Rather save and spend it on the downpayment for your next flat. For own use properties there will be no tax benefits at all.

[@DanielLic-i2c]

@@gharingermany I see. Thank you very much for the answer and advice.

[@shadyahmed2274]

What is the lumpsum option called in german? And how much 5% paid per year in lumpsum amount would decrease the duration of the mortgage? Is there a calculator for that?

[@gharingermany]

Lump sum option is call „Sondertilgung“. How much it will decrease the tenure will depend on when you pay it (the earlier the more time it will reduce) and what your interest rate is.