The discount, also known as discount , is the difference between the amount paid out, such as a loan, and the amount that is actually to be paid back. If the loan amount is 1500 Euro, the actual loan amount is 2 000 Euro, the difference of 500 Euro is the discount. Often it finds its application especially in mortgages. The amount of the fee depends on the current level of interest. There is also a fixed interest period, where the rebate is usually 10 percent. It also depends on the rank entered in the land register and the agreed term .
The discount is always given as a percentage, although it may also be the case that an amount is mentioned. It has the function of covering fees to be paid in advance. It may also include the interest paid in advance, which will reduce the actual payment of interest. In the case of real estate financing, a discount can bring advantages, because the benefits that have been paid in advance are also tax deductible if certain conditions are met.
The decision to take advantage of the rebate should be considered very well, because this increases the monthly amount to be paid, after all, both the loan amount and the rebate have to be repaid. However, the discount also has the advantage that the monthly burden is smaller, because the interest prepayment has taken place. Nevertheless, the amount of the loan is higher than without the deduction.
Self-users of real estate have no tax advantage with the discount, because it can no longer be deducted from the taxes. If you take out a loan to rent a property , you have the option of claiming the deduction as income-related expenses. The reason that a rebate is agreed may be, for example, the use of a more favorable interest rate, which is granted by the bank.
Not only in the case of loans, the discount comes into play, even for equities, especially in warrants trading. Here, the discount is called in percent. This percentage amount is the amount that is between the direct purchase amount of the share and the amount to be paid when a share is purchased with a warrant.