Is there a good calculator for indirect vs direct amortisation?

I am looking to finance an apartment.

We are at the crossroads of selecting direct vs. indirect amortisation.

If we go for indirect amortisation, the problem that the third pillar will be gone for our old age. Also, the bank only offers overpriced funds with a TER of >1.5 %. I am currently at VIAC and would like to continue paying into a low cost solution.

We can currently easily afford direct amortisation. But paying back money that costs >1 % is kind of useless.

Does anyone know of a good calculator for direct vs indirect amortisation that also includes opportunity cost of lower returns on a third pillar?

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In my view the problem with direct amortization is mainly in the opportunity cost.
Migrosbank asked me for indirect amortisation with an insurance for loss of income.
I found Generali to be the cheapest, and it allows 100% stocks

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I’ve seen a couple of threads of people asking about direct vs indirect amortization.

I’ve found (and used) this online tool

It allows to put in all the details of your situation, number of mortages, amount, interest rate, and also the city you live in, and then calculates which solution is better for you, direct or indirect (based also on the taxes of your city).
I didn’t check if it’s accurate though (I mean, to do it I’d need to re-create the tool myself).
Maybe it helps


Bank prefer than you pay higher interest rate for life. Insurance prefer you take life insurance :slight_smile:

I think that’s almost not possible to calculate due to interest rate change during years.
3A bank can be used any time for reimburse debt each 5 years if needed. 3A life you lost money if you remove cash.

Not all insurance 3a are life insurances, you can have insurance 3a where you only cover the loss of income

Hi, great link. It answers part of the question rather well. This is almost what I was looking for.

The problem is that every salesperson and this tool assume that you don’t have a 3rd pillar anyway and that you will start paying into one because you have a mortgage. Of course you have the tax advantage then.

I kind of suspect that

  • if you already have a 3a with VIAC AND
  • if you have sufficient means (steady high earning job, 6 figures on the side)
  • then it is better to continue your VIAC (or similar 3a) and do a direct amortisation.

Compared to the situation where you are being forced to use a crappy 3a fund from an established bank with a 3-4 % potential return gap compared to VIAC (as is my case). I was not able to pledge my external 3a for UBS, they insist on going with their own. But we got a pretty good deal overall, so I won’t complain too much.

My SO and I have decided to go with 3a anyway because it is less risky.

Of course, if you are able to contribute the max to your 3a and also put money aside for direct amortisation, that is the best solution. But I don’t think a lot of people will realistically be able to do that. Most people will need to chose between direct and indirect.

VIAC is good but if market plunge you lost a lot of your funds.
Direct is cool because decrease your debt but only when interest rate increase.
Indirect is almost better because you can do what you want of your money and trying to beat bank interest rate during this year.

For tax calculate because for me it’s still more expensive to pay interest at the bank than pay tax for this amount. The best way is probably made his own 3a and choose what you can do with your money but law isn’t with us for the moment :slight_smile:

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