Not sure if its a good idea or not to start a new thread but the one I found closest to my question is 3 years old…so here goes and apologies if too much detail (please merge the thread if I’ve missed one thats close):
Objective: i need to negociate 433k on my mortgage in a few months and I’d appreciate a devil’s advocate (or more) to help challenge my thinking since it will have a big impact on my next few years of investments/taxes.
current hypo: 633k CHF
amortisation indirect via 3A, all invested with bank’s swisscanto funds with crazy rate but only option I have to invest + 3k CHF direct amortisation per year
current PPE value on mortgage 735k CHF
PPE was bought from a family member, so i absorbed his mortages (yes pluriel) but which allowed me to negociate 0 CHF downpayment since the bank agreed to consider the « family price reduction » as my 10% cash + my 3a put in « gage » for other 10%.
the person I had bought it from had split the mortage into 4 tranches (yikes) and the bank wasn’t open to merge then (i didn’t push since I liked the 0 CHF downpayment), but at the next negociation I plan to merge 3 of 4 for 433k of the 633k overall
the 66% rule for me is latest 2030, with current outstanding amount due 143k. I already have almost 200k in my 3a invested, but the bank won’t release the gage until the 143k is either held in cash or paid back outright - in the meantime, they only consider a 70% factor of value while invested (even on an investment they max at 45% equities)…not that I’ll pay 10 years invested at those rates…
already asked the bank to re-evaluate PPE market value: i think its undervalued which would effectively lower the outstanding amount to reach 66% since higher value, thus releasing my 3a with less taken out and therefore less tax (worst case is 143k and 8k tax)… I think/hope PPE is at least 100k more in value (i think down to 2k tax).
i sell the whole 3a before the negociations regardless. Its had a decent return but the total costs are simply crazy (1.8-1.9%). I pay back based on new value retained for ppe to get to 66% (including whatever tax due on 3a payment…nothing if valued at 950k)…move the rest to Finpension (not the part I’d like to debate yet )
my logic: need to do it anyway before 2030, frees up 3k cashflow/year to invest in ETF, frees up 3a to invest 10 years earlier at >2x stocks (45% now) and >4x less costs (start multiple accounts to spread withdrawl), reduction in debt should be ok for wealth tax (TBC) but the interest to reduce marginal rate for taxes I’ll need to compensate…in the end also frees up flexibility for future opportunities / negociations since mortgage less than 66%, and i can merge the last tranche in 2030 to move overall mortgage if i want (my relation with the bank is actually quite good so I don’t want to be dramatic…no issues to stay if rates are good )
SIDE NOTE: the bank only considers the value of the invested 3A at 70% until its sold and is even giving me a hard time every year when I try to invest the next years 3a contribution ( I don’t understand it, especially at their 0.5% added commission for doing nothing )
This experience has already taught me a few lessons about what not to do next retail investment (that a whole other thread for anyone doing an extension on their house/PPE) but I consider myself luckier than most to have this « problem », so no worries.
Any advice is welcome - apologies again for the text wall.