The total monthly costs consist of the interest, amortization and ancillary costs for one month.

The interest cost figure is the actual value as defined in the mortgage agreement. The ancillary costs are estimated.

Amortization payments can count as costs, but are in fact a kind of “forced saving”. This is because these payments effectively build equity in your home (transferred from your account to the property).

Interest costs
The costs incurred by the mortgage provided. This amount goes to the mortgage lender (insurance company, bank, pension fund or investment foundation).

Calculation:

Mortgage amount × interest rate = annual interest costs.
Annual interest costs ÷ 12 = monthly interest costs.

Amortization
Usually, up to two thirds of the property's value is amortized. This occurs over a period of 15 years.

For the sake of simplicity, the amortization amount is defined as 1% of the total mortgage.

Calculation:

Mortgage amount × 1% = annual amortization costs
Annual amortization costs ÷ 12 = monthly amortization costs

Ancillary costs
These include all the running costs for the property, such as heating, chimney sweeping, rubbish collection, water, garden maintenance, premiums for building and building liability insurance, washing machine etc. This budget item also includes value-preserving investments i.e. small repair jobs.

For the sake of simplicity, ancillary costs are defined as 1% of the purchase price or property value.

Calculation:

Property value × 1% = annual ancillary costs.
Annual ancillary costs ÷ 12 = monthly ancillary costs

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