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The term annuity comes from the economy and referred to an annually recurring payment. Consumers know the annuity usually in connection with a mortgage loan, even though each installment loan represents an annuity loan. Colloquially, the term in this context is the most common usage. The annuity is composed of two components together, the interest rate and the repayment. Annuities must be distinguished between different versions. Still the possibility of a constant repayment is in addition to the variable alternative the fixed annuity.

The fixed annuity is the most common expression. Loan will be sufficient in most cases with a fixed interest rate, the rate has remained constant over the agreed interest rate. Because an annuity contains also a repayment performance, these inevitably changed with each allocation.

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