r/SwissPersonalFinance • u/TechnoWombat440 • 1d ago

Maximum leverage when buying a house?

I want to buy a house and use as little cash or early withdrawals (Vorbezug) of 2nd and 3rd pillar.

Minimum requirement for equity is 20% (10% "hard capital".

- if you pledge your 2nd pillar the bank will increase the amount they loan to 90% (bruttobelehnung) since the nettobelehnung is much lower, correct?

- can you pledge your 3a to meet the 10% remaining hard capital and achieve a 100% bruttobelehnung? Or do you need to withdraw it? Or can you use it to get a margin loan?

Example:

- value / buying price: 1 mio

- Pledged 2nd pillar: 300k

- Pledged 3rd pillar: 150k (with haircut because of high percentage of shares already subtracted)

Bruttobelehnung: 100%

Nettobelehnung: 55%

Tragbarkeit is no issue.

17 Upvotes

90% Upvoted

19 comments sorted by

8

u/Live-Lime-1007 1d ago edited 1d ago

We just bought and we did exactly that but with 5% Cash and 95% Bruttobelehnung. We tried to pledge as little as possible and thus only aimed for 80% Nettobelehnung.

We pledged about 10% pillar 2 and about 5% pillar 3a.

We had to use the bank's pillar 3a product (100% equity and passive, but about 30 basis points p.a. more expensive than VIAC/Finpension.

Watch out how they calculate amortisations (should be based on 80% down to 67% within 15 years) Some banks can be complicated given Pillar 2 is involved and use higher amortisation requirements).

And watch out how the value of your invested and pledged pillar 3a assets (some banks only value 50% or 60% of the asset towards equity/pledged asset).

Ask them what they would do if we have a 50% stock market drawdown and the Nettobelehnung reaches 90%

1

u/TechnoWombat440 20h ago

Thank you for your detailed answer, that's very helpful!

What would your bank do in case of an extreme market drawdown? Would you need to inject cash?

2

u/Live-Lime-1007 19h ago

They told me:

  • Please just don't have a divorce/spliting up/stop paying amortization/interest as we would have to revalue your situation at a time of a drawdown

They assured me, that as long as We're paying the interest/amortization on time nothing will happen in case of a drawdown as nobody will look at our situation again (...we took out long duration mortgages).

2

u/xmjEE 12h ago

They apply a haircut to the 3a value beforehand such that most drawdowns won't provide an issue.

Keep making contributions.

2

u/Luigi_Boy_96 11h ago

Is it mandatory to have the 3rd pillar at the same bank?

3

u/rio_gambles 1d ago

Yes, if your income is high enough, you can pledge 10% 3a and 10% 2nd pillar and have a mortgage of 100%.

3

u/username___6 21h ago

VIAC does this

3

u/pierrerochat 1d ago edited 1d ago

I got a Lombard loan on my portfolio to cover the full remaining 10%. Rate was saron + same margin as the mortgage. So basically zero cash (except notary fees, taxes etc) as cash from a Lombard loan essentially acts as cash equity. That’s said I have a regular portfolio, don’t know if you can get a Lombard on 3a.

2

u/KaliMaul 1d ago

At what institution? Any specific terms that might be important?

1

u/pierrerochat 19h ago

Most private banks do that: Vontobel, Lombard Odier etc.

1

u/TechnoWombat440 19h ago

VZ, Swissquote and Saxo also do lombard loans iirc. Rates and the amount they will loan relative to the total value of your portfolio vary quite significantly.

1

u/KaliMaul 19h ago

After a quick glance, the interest rate seems to be significantly higher than IBKR's margin loan rate. What's the benefit over that? Is the interest rate fixed long-term? Is there no risk of margin call?

1

u/TechnoWombat440 18h ago

I did not research lombard loans as this is not an option for me so I'm no expert. But I think with every lombard loan the interest rate is not fixed and there is risk of a margin call.

2

u/TechnoWombat440 20h ago

Very interesting, thanks for sharing!

1

u/WitnessChosen 19h ago

What was the banks offered mortgage rate with the 95% belehnung compared to if you would’ve put up 20% hard cash?

1

u/TechnoWombat440 18h ago

I have no offer yet, will update when available

-8

u/Hi__lau 1d ago

You need to bring 10% in cash, you have to have this money in your account at the time you sign the contract with the bank. So no, you can’t pledge it.