I have a mortgage with UBS for a total of 512’000 with 350’000 fixed until the end of 2024, and another 162’000 in Libor. I have a total of 96’000 to amortize (remaining 65% will be the mortgage) and I planned to have this done before my fixed mortgage renewal is due. The reasoning behind this is that I will have a stronger negotiating position and the possibility to move my mortgage to a low cost provider if needed.
I amortize indirectly to UBS 3a accounts (plain, no investment funds) and I have initially planned to amortize to multiple 3a and cash out in 3 consecutive years. The advisor tried to convince me several time to invest in their 3a funds, but the TER of 1.72% is just too much.
I’m now considering switching to direct amortization, and starting my 3a investments with VIAC. This way I will still profit from tax deductions, while my amortization goals will stay unchanged.
The negative side of this is that I will miss out on any capital gains on cash used for amortization. With current Libor rates, my return on this amount will be a poor 0.85%/year.
So to sum it up, my options are:
- Keep amortizing to plain 3a at UBS and cash out when due
- Switch to fund backed 3a at UBS and risk that my amortization plan will fail due to stock market underperformance
- Amortize directly and go with VIAC 3a starting 2019
What would you do? (Edit: I recommend jumping straight to post number 10)