VIAC seems to be addingt new offerings heavily, after the life insurance last week, they now also offer a mortgage offering together with WIR Bank, see Mortgage – VIAC
There are a couple of implications, you need to be already a VIAC client (i.e. have your 3rd pillar or Freizügigkeitskonto with them), but the offer looks quite attractive at currently 0.55% SARON, 0.89% fixed 5Y and 1.19% fixed 10Y.
I think particularely interresting for mustachians is the fact you can pledge your VIAC assets - something I belive did not work before with other banks.
yes, another limitation that is problematic for me is the maximum of 10% of mortgage for renovation costs. I have a property lined up which will cost CHF 1M but needs 350-400k renovations.
I didn’t dare to hope for it: that makes for a mortgage offering with pledged/indirect amortization through 3a using VIAC and if a life insurance is temporary required for the mortgage purposes but could be canceled later, it is also available.
This is very strange indeed… Ticino is the only Swiss Canton excluded. Might be worth it to get in touch with them in order to understand the reason… @VIAC ?
well yes, at least this is what they claim: “No matter how high your income or your own capital is, with the VIAC mortgage all customers receive the same low interest rate. You can save yourself the hassle of negotiating.”
Don’t UBS offer something similar regards pledged 3 pillar? So the added benefit is that VIAC’s 3 pillar offering has lower fees
In case it is helpful for anyone, when I last looked into buying a property a practical limitation of “100% finance” (as VIAC call it) is that SNB requires amortisation to ~66% over 15 years. Main problem, the amortisation is an outgoing in the affordability test. In addition once the property price is >600k the annual amortisation is above 3 pillar allowance so you have to block additional cash
Example: 2M property with down payment funded fully by pledged 3 pillar => amortisation 45k/y for 15 years, 14k of which can come from 3 pillar for a couple
It depends. Low yields is positive for buy to let because it reduces the costs of leverage.
What is more important is how much is the rent is in % from purchase price. I live in Zurich and would never buy-to-let here because we are speaking of 2.5% gross return, even with 80% mortgage, the return on investment is not magnificent.
But if you find an apartment which you can rent for 4% of its purchase value, that becomes interesting with return on invested capital of above 7% even after mortgage and other costs.
Yes but such properties are probably in not so great locations, putting the (in any case large, given we are in CH) capital at a higher risk than e.g., central Zurich.
I decided to look for RE opportunities abroad, where high returns (with the annexed high risk) can be achieved with much smaller initial capital. Anyway, sorry for derailing the thread.
Your calculation is wrong, you don t need to amortized 3rd Pillar contributions as they count as cash (so called hard core funds) :
Assuming 2 000 000 lending value, 20% lending ratio (i.e. you need to provide 400k down as 3rd pillar pledge), 33.33% equity after 15 years you just need to repay 266 600 over 15 years i.e 17 774 per year. So you’d be down to repaying about 4 000 per year directly into the mortgage on top of maxing out 3rd pillar contributions. The main problem is that you need 415k salary to be able to cover the 5% calculatory interests + 1% maintenance + redemption to be eligible to that financing…
Thanks, indeed I think you are right and the amount pledged as 3 pillar counts as equity for the repayment calculation
It’s a while since I talked to UBS but now I recall my frustration was that pledged 2 pillar does not count as equity (I am not so old so I do not have anywhere near 400k 3P). So even though I had a lot of assets I could pledge, I was going to have to make large amortisation payments each year and in addition the affordability test as you outline
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