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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