Monthly Payment Rate, TAEG and LTV
Calculate your monthly rate, TAEG and loan-to-value for your property mortgage. French amortization formula in accordance with CCD2 (D.Lgs. 212/2025).
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Frequently Asked Questions
What is the LTV of a mortgage?
Loan-to-Value (LTV) is the percentage ratio between loan amount and property value. For example, a €160,000 loan on a €200,000 property has an 80% LTV. Banks usually finance up to 80% of the appraised value; above 80% require additional guarantees like First-Time Buyer Guarantee. A lower LTV means better terms for the borrower.
What is the difference between TAN and TAEG in a loan?
Annual Nominal Interest Rate measures only the interest cost on financed capital. Annual Effective Global Rate includes all mandatory loan expenses: property inspection, appraisal, mandatory insurance policy, substitute tax. Directive CCD2 (D.Lgs. 212/2025) obliges banks to clearly communicate both on every offer.
How does French amortization of mortgage work?
Monthly payment is constant throughout the loan term with French amortization (most common in Italy). In early payments, interest charges are predominant over principal, then the ratio reverses gradually. The formula is: rata = P × i / (1 − (1+i)^−n), where P is the amount, i = TAN/12 and n is the number of months.
What is the difference between fixed and variable interest rate loan?
Fixed-rate loan maintains TAN unchanged throughout the term: the payment is predictable but the interest rate is usually higher at the start. The variable-rate loan (indexed to Euribor) starts with a lower rate, which can fluctuate over time, increasing or decreasing the monthly payment. This calculator simulates a fixed-rate loan with a constant payment; for the variable-rate loan, the result indicates the initial scenario.
Is the mortgage TAEG calculation accurate?
Calculation is mathematically correct: use Newton-Raphson method (tolerance 1e-7) as per Annex 5C Circular 217/2012 of the Bank of Italy, updated for CCD2 compliance. Results are indicative: final bank offer TAEG depends on specific policies and fees not included here. Always refer to the European Standardized Information Prospectus (PIES) for binding comparisons.
Can I use this calculator for a home mortgage?
Yes, the calculator is suitable for both first-time homes and real estate investments. For a first home, remember the Consap Guarantee Fund (loans up to 80% of the appraised value with LTV up to 100% for under 36), passive interest deductions (19% on a maximum of €4,000 per year for primary residence) and tax substitution benefits (0.25% instead of 2%). Consult a mortgage broker or financial advisor for a personalized plan.
How is it used?
- Insert loan amount
Specify the amount you want to finance, for example 200,000 €. The calculator will use this value to calculate your monthly installment with a French amortization plan.
- Insert property value
Indicate the purchase price or appraisal value of the property. This value is required to calculate the Loan-to-Value (LTV) percentage, which banks use to assess mortgage risk.
- Set TAN and duration
Insert the Nominal Annual Rate (TAN) offered by the bank and the duration in months (e.g., 240 months = 20 years, 360 months = 30 years).
- Add any additional expenses
If the contract includes training expenses or initial fees, include them to get a precise TAEG according to the CCD2 directive.
- Read Results
Get monthly repayment, real mortgage cost (TAEG), loan-to-value percentage, total to repay and overall interest. Compare with other offers using TAEG as the unique indicator.
How does a co-lender calculator work with TAEG and LTV?
Calculator estimates monthly payment, TAEG and Loan-to-Value of the mortgage in a few seconds. It uses the methodology from Annex 5C of Circular 217/2012 by Bank of Italy, updated for compliance with CCD2 directive (D.Lgs. 212/2025 effective from January 10, 2026).
Monthly payments are calculated using the French amortization plan (constant annuity): the borrower pays the same amount every month, consisting of an initial high interest quotient and a growing principal amount. This method is most commonly used in Italy for mortgage loans, both at fixed and variable interest rates.
The TAEG includes, in addition to interest, all mandatory contract costs: survey fees, expert opinions, compulsory fire insurance policy, substitute tax. This makes the TAEG the correct tool for comparing offers from different banks, not the TAN. The CCD2 obliges each institution to disclose the TAEG both on the contract and in advertising.
Loan-to-Value (LTV) is the ratio of loan amount to property value. Banks typically finance up to 80% of appraised value; higher LTVs require additional guarantees like First-Time Homebuyer Fund (Consap). Lower LTVs below 60% often grant access to more favorable interest rates.
All calculations take place in the browser: no personal data is sent to external servers. The tool has an informative purpose; for binding offers, always refer to the European Standardized Information Prospect (PIES) provided by the bank and consult a licensed credit advisor.
Example practical: loan of $200,000 at 3% TAN for 240 months
- Amount: $200,000, Property Value: $300,000, Tax Rate: 3%, Term: 240 months (20 years), Fees: $0
- Low loan-to-value ratio - 66.67% (lower than 80% financing conditions - standard terms)
- Monthly interest rate i = 3%/12 = 0.25%
- Monthly rent: approximately €1.11
- Total to be returned: approximately € 64,819
- Total interest ≈ 66.189 € | TAEG (no fees) ≈ 3.04%
Vocabulary Dictionary
- Too long
- Annual Nominal Rate: measures only interest costs on financed capital, excluding additional loan fees.
- Tag or Label
- Annual Effective Global Rate: includes all mandatory mortgage costs (interest, appraisal, inspection, insurance). It is the prescribed indicator by the CCD2 directive to compare different offers.
- Let's Talk
- Loan-to-Value Ratio: percentage of loan amount to property value. An 80% LTV means the bank finances 80%, and the borrower pays 20%.
- French depreciation
- Fixed repayment plan: the monthly payment remains constant throughout; interest charges are predominant at the start and decrease over time, while capital payments increase.
- Bite Size
- European Standardized Information Prospectus: mandatory pre-contract document that banks must provide before signing, containing TAN, TAEG, repayment plan and terms of withdrawal.
- Keep it brief
- EU Directive 2023/2225 on consumer credit, received in Italy with DLgs. 212/2025. Enhances credit transparency, including mortgages: obligation to disclose TAEG in advertising and contracts.
- Investigation
- Charge a reasonable amount for the bank to analyze your mortgage practice, verify your creditworthiness and inspect the property. Includes in the calculation of the TAEG.
Do you need a custom analysis?
This tool is free and informative. For in-depth analysis with AI on-prem - private data, zero cloud - contact Federico.