Cortana
December 11, 2020, 7:34am
60
@MrCheese
Plus, check out my other post regarding 3a amortization:
Cortana:
Let’s assume you buy something for 900k with 180k equity and 720k mortgage. Banks want you to reduce your mortgage down to 2/3 within 15 years or at least build up enough pledged assets to get there (indirect amortization). So from 720k to 600k within 15 years means you have to amortize 8k/year. There are basically two reasons why banks want this. First they reduce their own risk if the house needs to be sold. And 2nd your income will be reduced significantly once you are retired and thus your debt sustainability will be lower. That’s why with indirect amortization with 3a pledging you don’t have an obligation to amortize the mortgage after 15 years. They’ll let you wait till you want to retire and check the situation then. Maybe once you retire the house isn’t worth 900k anymore, but 1200k. So your mortgage (still 720k) just makes up 60% of it and thus making further amortization obsolete, your 3a will be freed if your retirement income is high enough to substain the 720k mortgage.
Now you have 2 options for amortization:
Directly. Mortgage will be reduced by 2k/quartal for 15 years.
Indirectly. You have to use their own 3a and pay a combined 8k/year into it. You are still able to invest it, but you need to use their funds.
You might think now “No way I’m going for their shitty actively managed 3a solution, I’m going to amortize directly”, but from a financial side this is the worse decision. You basically end up investing 8k per year into your property to reduce your interest costs by less then 1%. A wiser decision would be to pay 8k/year (4k each) into their 3a and the rest (2.8k each) into Viac. Then invest anything else what you save in IBKR.
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