I’m in the process of buying a house. From the style it looked very obvious like asbestos was there. Seller agreed to test and confirmed it. Got a discount.
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Bear in mind that with any real estate renovation project, especially in old houses, it will 1) cost more 2) take longer and 3) have a high risk of not being as value-accretive as you thought it was.
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I’d be surprised if any home bought to live in in the last few years will yield are return. Better to acknowledge it as consumption.
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Definitely a good bargaining chip when buying a property, if it doesn’t bother you.
I dare say that if you factor in what you save on rent, you will usually end up with some amount of return after costs. I would see rent savings as dividends, as would be the case with rental income earned when renting out a property.
“Jein” as Germans say. The ban was on bringing new asbestos goods into circulation, but did not make any mention of existing stock, and was also very vague on imported goods (still an issue today with many products made in China). A similar ban in the EU only came in 2005. Hence my 2010 recommendation for “safe” housing.
With 300k just on renovations, it seems it would have been much cheaper to rent.
Well, the meaning is clear (but cheaters do exist).
I always consider buildings started in 1990 and finished later (up to 1992, 1993) as at risk.
Anything after is safe as long as you are not dealing with crooks of course.
The biggest risk I see is dependency on 2 incomes for sustaining the mortgage/ loan. If one of you loses the job for even a few years (not improbable for anyone as things develop) then you will have to talk to the bank.
We are in a similar situation, on our roof / under tiles exists asbestos but there is no risk as long as you don’t touch it. As long as roof it’s not leaking I am not considering to replace it, it just doesn’t make sense. PV installation again doesn’t make sense when you calculate ROI long term vs. investing that money. (Btw, there is a new option now, to use PV tiles directly - technology that is new and might be more rational in the future instead of separately doing roof then PV.) Old but functional kitchen and bathroom should probably be done after core energy related items.
Someone told me, that as long as a system works, don’t touch it 
What about heating and electricity? Are these systems ok?
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6 posts were split to a new topic: Solar PV Tiles vs new roof
Going back to the original post, I almost always ignore my advisor at UBS. I’ll listen, but will always decide on my own criteria / thought process and not due to pressure from a sales person.
Your advisor’s interest is to get you on the hook so the bank makes more money. And they will make more money either way
- interest (incl. risk premium for 90% LTV)
- and even if not interest, then forced sale if you’re stuck in a rut and can’t make payments
WHen I got my mortgage (on a house well above Swiss average in terms of price) with my wife the bank was activelly pushing “we’re happy to give you a much higher mortgage so you can buy an even bigger house” as well as “you’re asking for a mortgage with 30% of your own equity but we’re happy to reduce that to only 10% in your case”. I am glad I did not listen. Not longer after the house was built: the corporate hammer hit and I got terminated. No financial worry, in a comfortable position. But, don’t make a decision like the one you’re making based on the best case scenario and also not the worst case scenario but on (my view) the scenario where you can comfortably deal with the highest regret no matter which way things go in life.
You have a relatively cheap place to live = good
You have a wife who also works = good
You have kids = responsiblitieis
But you also appear to have moderate savings = not good
In your shoes, I’d focus first on expanding your savings (and putting it to work in equity market)
The money won’t be lost, you can still decide to do house fixes in 2-5 years, you’ll sleep better.
Same with me, in an excel spreadsheet it would have made more sense to pay down the mortgage less, to do less of a own equity in the house at the start, but it is comfortable knowing we’re not at all stretched financially.
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Question for the original poster, is this math correct:
NEW SITUATION
- 1020k mortgage (500k old + 280k old + 240k new)
- 90% LTV implies house value of 1133k
CURRENT SITUATION
- 780k mortgage (500k old + 280k old)
- Assuming 1033k minus 240k that would give 893k value
- This implies you’d currently already be at 87% LTV
Assuming above math is correct, and also taking into account your modest savings / stock portfolio vs. a good dual income household, it appears to me that levering up is unwise. You are already stretched as-is. Imagine if you’d lose your job and you have the bank breathing down your neck on your current almost 90% LTV and with 2 kids… is that comfortable? I think not.
You’ve got a good dual-income household and have not stretched yourself with your current mortgage (well done) but your non-real estate savings are modest. Stretching up a mortgage does not seem appealing to me. In your shoes I would hold off on increasing your house investments and instead
- Critically assess your spending so you substantially bump up your monthly savings / investment rate
- Delay house investment a few years
If I’ve misinterpreted your numbers, please clarify. For now, the data seems to support (at least in my mind) what my gut feeling was already saying.
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@niore Coming in late, but want to add one angle thats been touched on but not fully unpacked: youre treating this as one decision when its actually two.
The mandatory work (asbestos, roof, facade, PV) has a real subsidy deadline and energy logic behind it. The optional stuff (open kitchen, attic, retaining wall) does not. Those two have completely different risk profiles and the financing question for each is different.
For the mandatory 160k net, your existing cash plus maybe 80 to 100k of fresh mortgage probably handles it without going to 90% LTV. You stay under 90%, your advisor cant push you on premium pricing, and you keep your contractor income buffer intact.
The optional 130k for the kitchen and the attic is where the 90% pressure actually comes from. And honestly with 1 and 2 year old kids, those projects will be harder to live through in 2026 than in 2029 anyway. By then you have either renewed two contracts (different risk picture) or you havent (and youre very glad you didnt borrow at 90%).
The subsidy deadline is real but it only locks in the mandatory part. Decoupling the two gets you the kicker without taking the leverage risk for the lifestyle upgrades. Anyone here actually split a renovation that way, and did the staged approach work out?
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It can be more complicated, for example if you want to remove the asbestos residing under the tiles from the kitchen, you will need to take the kitchen out first.
You might as well leave it in place until you do the kitchen work.
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Yes, a lot of (most?) asbestos is fixed and harmless as long as it’s left undisturbed. Not mandatory to renovate/remove.
Still a good point from Albis.
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But then you need to plan & organize twice asbestos removal and tile replacement, which again ads extra costs, and then aesthetically maybe you’ll have new tiles everywhere else and old ones in the kitchen etc.
This takes it out of the mandatory section then, so what’s really mandatory can be even more subjective. Is the roof leaking? If no, why repair it? If yes, how often? If it leaks and you repair it once every 2-3 years, is it worth it to replace it now? etc…
@evertruelife Fair point, my “mandatory” was shorthand and a bit loose. What I really meant was “subsidy eligible and time locked” rather than “physically necessary right now”. Your example is a good catch.
Asbestos under kitchen tiles is exactly the case where the two decisions get fused by physics, not by financing. If you have to open the kitchen anyway to do the asbestos right, then yes the kitchen reno gets pulled into the mandatory bucket whether you wanted it there or not.
But thats also where the financing math stays useful. Even with the kitchen pulled in, the question becomes how much can I do without crossing the 80% LTV line where the bank starts charging the risk premium. Below that line, I want to push as much in as makes sense. Above it, every additional CHF gets more expensive on the spread.
So the question I would ask niore now is which renovations are physically locked together, and where does the natural cut sit just under 80% LTV. The “what is mandatory” line and the “what hits a bank threshold” line are different lines, and they probably dont overlap perfectly.
Has anyone here actually mapped out their reno phases against LTV thresholds rather than just total cost?
Never thought I’d hear renovation staging described as physics
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