Annuity vs linear repayment for a family loan

Both annuity and linear repayment satisfy the 360-month rule for mortgage interest deduction. They differ in how the monthly payment develops and how much interest you pay in total. Here is the difference in plain numbers.

Annuity: the same payment every month

With an annuity the monthly payment stays constant. Early on it is mostly interest with a little principal, later it flips. On €25,000 at 5% over 5 years the payment is about €472 per month, every month, and the total interest is about €3,300.

Annuity is the family favourite: predictable for the borrower, easy to budget, and the standard for home loans.

Linear: higher at the start, cheaper in total

With linear repayment you pay back the same slice of principal every month, so the interest shrinks as the balance drops. The first payment is higher than with annuity, the last one lower, and the total interest is a few hundred euros less on the same loan.

Linear suits borrowers who can handle a heavier first year and want to minimize total interest.

FLUX5 calculates both structures side by side before you sign. You see the monthly amounts and the total interest for each, and the contract follows your choice automatically.