Discount – definition, discount & calculate

Disagio – Disagio or as a synonym Damnum or Abgeld cheapens the initial interest rate of a loan when buying a property. By definition, a person is granted a loan and a discount of the loan is retained, this sum is called a discount. The sum acts as a prepayment of interest. In return, the buyer receives an offer of a low normal interest rate, which can be calculated from the size of the loan and the amount withheld. With a discount, the buyer is attracted by a lower monthly instalment charge.

Discount at a glance

  • Reduces the initial interest rate on the purchase of a property
  • A portion of the loan is retained and serves as an interest prepayment: discount
  • Low normal interest rate -> low monthly instalment burden

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