Forward Loan Calculator
Forward rate from lead time and monthly premium, plus payment, interest cost and balance after the fixed-rate period, the premium's extra cost and break-even rate.
Indicative market values, not statutory figures: about 0.01–0.03 percentage points per month of lead time is common, and many banks charge nothing for roughly the first 12 months. Your bank's offer is what counts.
3.50 % current + 0.24 %-points premium
12 months with premium × 0.02 %-points = 0.24 %-points
With Forward Loan
Without Premium (Reference)
The forward loan pays off if the rate for follow-up financing rises above 3.74 % by the drawdown in 24 months.
Note: These calculations are for informational purposes only and do not replace professional tax or financial advice. All information without guarantee.
FAQ
Frequently Asked Questions
What is a forward loan?
A forward loan locks in an interest rate today for a follow-up financing that is paid out up to 60 months later. Banks charge a forward premium of about 0.01–0.03 percentage points per month of lead time for this; many charge nothing for roughly the first 12 months.
When does a forward loan make sense?
When the rate rises above the forward rate by the time of drawdown. Example: 3.2 % today plus a 0.24-point premium gives 3.44 %; if the market rate at drawdown is higher, the hedge has paid off, if it is lower, waiting would have been cheaper. It offers planning certainty but is a disadvantage when rates fall.
How does the calculator work out the forward premium?
Premium = (lead time − premium-free months) × premium per month. The defaults are 0.02 percentage points per month and 12 premium-free months – with a 24-month lead time that is 12 × 0.02 = 0.24 percentage points. These are indicative market values; enter the terms from your bank's offer.
Are my entered amounts stored anywhere?
No. All calculations happen exclusively in your browser. Your inputs are never sent to our server or stored. You can safely enter sensitive financial data.
Guide
What is the Forward Loan Calculator?
The forward loan calculator shows what it costs to lock in today's rate for a follow-up financing that is only paid out in a few months: forward rate, monthly payment, interest cost and remaining balance over the new fixed-rate period, and the extra cost of the forward premium.
How does the Forward Loan Calculator work?
Enter the loan amount at drawdown (usually the remaining balance at the end of the old fixed-rate period), the current interest rate without lead time, the lead time until drawdown, the premium per month of lead time, the premium-free months, the new fixed-rate period and the initial repayment rate. The calculator works out the forward premium = (lead time − premium-free months) × premium per month, adds it to the current rate and runs the annuity loan (monthly payment = amount × (rate + repayment) / 12) through the fixed-rate period – once at the forward rate and once without the premium as a reference. The defaults are 0.02 percentage points per month and 12 premium-free months; these are indicative market values, not statutory figures.
Key Data and Facts
Forward premium: depending on the bank about 0.01–0.03 percentage points per month of lead time, and with many lenders roughly the first 12 months are free of charge. Lead time: usually up to 60 months. The forward rate is also the break-even threshold: if the market rate at drawdown is higher, the forward loan has paid off; if it is lower, waiting would have been cheaper. Obligation to draw: if you do not draw the loan, you usually have to pay a non-acceptance fee.
Step-by-Step Guide
How to calculate a forward loan step by step: 1. Determine the loan amount: the remaining balance at the end of the current fixed-rate period according to the repayment schedule – this amount is paid off with the forward loan. 2. Set the lead time: the months between signing and drawdown, usually 12 to 60 months. 3. Enter the bank's premium: about 0.01–0.03 percentage points per month of lead time; many banks charge nothing for roughly the first 12 months. 4. Calculate the forward rate: current rate + (lead time − premium-free months) × premium per month. 5. Choose the fixed-rate period and initial repayment. 6. Read the result: monthly payment, interest cost and remaining balance at the end of the fixed-rate period at the forward rate and, for comparison, without the premium; the difference is the cost of the rate lock. 7. Decide: the forward loan only pays off if the rate rises above the forward rate by the time of drawdown – it is a hedge, not a guaranteed saving.
Calculation Example
Remaining balance €180,000 in 24 months, current rate 3.2 %, premium 0.02 percentage points per month, 12 premium-free months: (24 − 12) × 0.02 = 0.24 percentage points, forward rate 3.44 %. Fixed-rate period 15 years, repayment 3 %: payment = 180,000 × (3.44 % + 3 %) / 12 = €966 (without premium €930). If the bank charges from the first month: 24 × 0.02 = 0.48 → 3.68 %, payment €1,002. If the market rate rises to 4.5 % by drawdown, follow-up financing without a forward loan costs 180,000 × 7.5 % / 12 = €1,125 – €159 or €123 more per month. If it is below 3.44 % at drawdown, waiting would have been cheaper.
Sources
Official sources
Calculations are based on applicable German laws and official data:
- Deutsche Bundesbank
- Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)
- Statistisches Bundesamt (Destatis)
Full methodology at Methodology.
Reviewed by Konstantin Iakovlev · Last updated:
Finance
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