The annuity mortgage is the most popular mortgage type in Germany, which is why we include it as a repayment model in our German mortgage calculator. An annuity loan is a mortgage with a monthly repayment that is always the same amount. In other words, you pay the same amount each month.
This annuity payment consists of both interest and principal repayment. The composition of interest and repayment changes slightly with each month. This is because each repayment reduces the remaining loan balance. Therefore, with a constant interest rate, and a declining remaining loan balance, the share of interest in the installments decreases month by month, while the share of repayment increases a little month by month.
This goes on until at the end of the loan, the principal repayments are almost 100% of the monthly annuity. In other words, your savings component (the repayment of the loan balance) increases, month by month, year by year.