Interest rate change: How we calculate
Formulas, rounding and assumptions for this calculation.
How we calculate
We compare two annuity scenarios with the same outstanding balance and remaining term. The new rate applies throughout that term. The calculator’s schedule uses the original rate. Euribor is not loaded automatically.
Both scenarios assume month-end annuity payments and a constant entered annual rate for the remaining term. Monthly rate = annual rate / 12. Interest rounds to cents monthly and the final payment may differ. New fees, insurance and subsequent rate changes are excluded.
Worked example
A €1,000 outstanding balance has 12 months left. At 0%, the regular monthly payment is €83.33; at 12% annually it is €88.85. The difference is €5.52 per month. These are regular payments; rounding may change the final payment.