What is an annuity loan?

An annuity loan is a loan where you pay the same amount every month for the entire loan period.
This makes it easy to plan your budget, since the monthly payment won’t change as long as your 
interest rate is fixed.

Even though the amount you pay each month stays the same, how it is divided between interest 
and repayment changes over time. At the start, when your loan balance is at its highest, most of 
your monthly payment goes to cover interest and less to reduce the principal. As time goes on 
and your balance becomes smaller, the opposite happens—more of your monthly payment is 
applied to repayment and less used for interest.

This setup gives you stability and predictability, since you know exactly how much you’ll need to 
pay each month. The details about your loan, including the length of the repayment period and 
the monthly amount, are clearly stated in your loan agreement