Fair enough, I made all my assumptions considering that the price of the house would only go up, hence making your 80% become 65% of the total money you borrowed automatically after 10-15 years. Obviously your full reasoning makes complete sense. Many thanks for the explanations.
They may very well increase as you say, probably even a bigger chance they will as compared to my catastrophic outlook. Still my early retirement goal is to have as little fixed financial obligations as possible, meaning no rent or mortgage left to pay. My FIRE capital projections are therefore proportionally larger.
I would think that the assumption of ever higher real estate valuations is not justified at the moment.
At the moment, Swiss real estate is not cheap. One of the reasons for that is the lack of alternative investments, especially bonds, in times of cheap money (asset price inflation). Swiss are generally more reluctant to enter the stock market and mortgages have been easy to get. Under pressure by the SNB, banks had already to change course in this. The price for appartments is also influenced by the need of pension institutions to get returns while being legally forced to keep their equity percentage low. This results in high valuations for larger houses with appartments to rent, hence also raising appartment prices.
While the future development of real estate prices is heavily dependant upon the location, there is a considerable general downside risk.
These seem to be the reasons for caution. As with all projections, they might not play out.
Edit check out this thread for more:
Money arrived in VIAC today, exactly 5 work days after they received my letter. Rebalancing will occur on 02.07.2018 until then I get 0.30% interest.
My UBS Vitainvest funds were “automatically” sold yesterday.