I prefer Sklavenitis over Coop 
Exactement!
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I have been told that there are mortgages that last like 90 years and it’s only interest-payment based. Isn’t that possible? You never own the property in this scenario
Yes and no. You always own the property. The bank has just the right to use your house as a collateral.
Many Swiss friends have houses taken over from their parents with mortgages on them and have sometimes even extended the mortgage with no intention to pay back the mortgage. Seems to be a great business for banks and hence there is no real intention to pay back. Maybe with the new law that changes now. Time will tell….
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As long as invested assets returned more than the interest on the mortgage, there was never a financial reason (besides sleeping well because of lower mortgage) to pay down the mortgage.
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And how many people are actually investing what they don’t pay to reimburse a mortgage? 
Everybody in this forum 
, beyond this forum I fear that for most of the people the free cash flows into cars or other lifestyle products.
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Which is exactly what we, as shareholders, want.
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Just came back from an appointment with UBS.
The long-term maximum leverage allowed is 66% LTV (need to amortise 34% within 15y or before retirement) and this sounds interesting as we run some simulations for some target properties values and the total monthly payment (amortisation and interest) is less than our current rent.
After 15y (that is after having paid off the 34% of the total value) we can only start paying off interest and no capital “forever”.
of course we will never fully own the property but one could said with capital gain or decide later to start amortising again).
Don’t forget upkeep and value maintenance.
(As well as heating etc. depending on if you compare with net or brutto rent)
I mean it’s also a great business for the other side, at current interest rates, it’s amazing leverage.
Correct.
My simulated monthly payment is still below my actual rent + expenses.
Geneva and 3 bed apartments rental cost is huge.
I have started now looking for buying opportunities. The idea is to amortise 35% of the loan in 15y and then only pay interest forever. Then sell and retire back to Greece and use capital to buy 2-3 flats
Can you give some pointers.
My experience is totally different. 3.5 rooms rent is 1’610 CHF/month all-in, which is in the regional average. Buying is about 800’000 CHF for something equivalent.
So 280 kCHF down (which means an opportunity cost of about 8’400 CHF p.a. assuming 5% return on stockmarket, 2% on home - I am however not that sure if it should be under inflation for home since after sale, I still have to live somewhere. In your case maybe not applicable since you geographically relocate to totally somewhere else).
520’000 CHF at 1.5% interest means another 7’800 CHF p.a.
Maintenance upkeep and value maintenance → minimum 1%, but I am not sure if this really covers the whole value upkeep (meaning also to bring it to an actual standard), another 8’000 CHF.
So total cost p.a. for buying is 24’200 CHF vs.19’320 CHF for renting. And with renting you have no risk of cost increase.
Sure, you do not need to put down 35% right away, it is just to simplify my calculations. But even with the minimum of 20% it would be 160’000 bound capital, meaning 4’800 CHF under the same assumptions so a total cost of 20’600 CHF for buying, with opportunity cost rising as you amortize up to the 35%.
Just a hint, UBS wants you to buy a home, they make money out of it. So I would really challenge their assumption. Especially the maintenance value. A finance researcher in Germany did a study and found out that value maintenance is closer to 2% than 1% for instance.
Put 10% down and pledge 10% of pension fund capital + third pillar. The math flips upside down.
Are you sure this can be done?
In my own definition “pledging” = “not having to convert it to cash but still making it count (at <=100%)”.
Which works for 3rd pillar (e.g. by transferring the funds to the institution giving the mortgage).
But for 2nd pillar I don’t see another way than taking it out as cash.
Or is there one?
Renting a 3 bed room flat in Geneva average much more around 1900-2300 chf / month charges included nowadays.
I am not sure about the average purchase price.
Yes but buying price is more like 1.5 MCHF (according to earlier posts). so 30-40% more rent but about 100% higher buying price. So it should be even more in favour for renting.
I have the same understanding. Only the 3rd pillar can be pledged, 10% of the cash is than covered by a low yield pension fund so no opportunity cost there.
I guess the pledged 3a cannot be invested in stocks (as a bank, I would not agree, but I actually have no idea), so the opportunity cost would apply on only 25% of the final mandatory 35%. Opportunity cost would drop to 6’000 CHF p.a, meaning a total cost of 21’800 CHF p.a. once you reach the 35% amortisation (keeping all other costs same).
Maybe I miss the point, but pledging your 2nd pillar is absolutely possible and a thing, for example to get 90% mortgage instead of 80%.
It won’t be transferred, but, well, pledged, i.e.the bank gets the right to access your capital from your pension fund in case of payment issues.
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Sure it can, I use my 3a to amortize indirectly and it’s max invested. The bank would actually encourage it, as it earns them higher fees.
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Oh that’s a new one for me then!
Thanks for clarifying.
That means “only” 10% in pure cash could be enough to get a mortgage (granted the bank deems you worthy according to all other criteria).
(I thought originally that P2 can only feed to those 10% through a withdrawal; not the other 10% via pledging)