3a Life insurance as a mortage guarantee?

So I finally got out of my (scammy) 3a life insurance, spending around 5k in “learning moment” (nice way to say that I lost money…). Of course my “advisor” tried to convince me otherwise as he don’t want to loose is commission. All his arguments where quickly debunked. Hard to sell a 2% fees on any deposit you make, especially with a 2.5% return rate estimated in 25 years…

The only argument I don’t know how to judge is that when you want to become house owner, you can use this insurance as a guarantee for the bank. I don’t know exactly how it works, but it seems that the amount of the insurance that you will pay at the end of the contract (120k in my case) can be use as a leverage for the mortage.

Is it true, and how does that work? And is there a similar but more mustachian way to do it, if it’s indeed an advantage?
I want to assess in 3 years from now how to consider buying something, so it’s an information that may be worth look into…


Yes, your non-life-insurance-tied 3rd pillar can be used for the same purpose.
(Under certain conditions)

I can be used in the same way you would use your 2nd pillar for a down payment on a mortgage on your primary household (under conditions, til a certain threshold - out of the 20% you need to bring on the table when you take a mortgage, only 50% (so 10% of the total mortgage value, can be gather by using you 2nd and 3rd pillars money)

What you wrote is wrong. The rule is the following :

  1. you need to bring in 10% minimun from your own savings that do not orignate from 2nd pillar withdrawals
  2. There’s no maximum when it comes to 2nd pillar contributions to buy a property as long as you provide the 10% from the point 1.
  3. There’s no such rule on 3rd pillar funds, they actually qualify for point 1.

2nd pillar and 3rd pillar funds can be used as collaterals to a mortgage, the main difference is that you still need to amortize the 2nd pillar collateral within 15 years or before retirement if you retire in the next 15 years whereas the 3rd pillar collateral does not need to be amortized.


This is important information before deciding on which one is better to use for real estate transaction. Apart from that, are there any other things that have to be kept in mind? Is there the same amount of tax to be paid while using 2nd or 3rd pillar? Anything else?

Withdrawals from the 2nd or 3rd pillar are taxed the same way I believe, there’s a specific rate for that which depends on the kanton of residence, note that it’s not taxed together with other incomes. If you withdraw from the 2nd pillar you give up on potential tax deductions as long as you don’t pay back what you withdrew in case you plan to make buy ins into the 2nd pillar in the future. Also if you sell your property you need to pay back that withdrawal into the 2nd pillar. On the 3rd pillar there’s no such rules.

When it comes to tax consequences, the money you withdraw from either plan will become subject to wealth tax.

If you decide to pledge instead of withdrawing, as I said 3rd pillar pledges counts as equity whereas 2nd pillar pledges may only give you better interest conditions but no equity.

1 Like
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, vous confirmez avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/