We support you in financing your own home and show you what the balance between equity and debt capital should be, and how you can raise enough equity to purchase your dream property.
How you can afford your dream home
When buying a house or apartment, the balance between equity and debt capital must be right. Long-term affordability should also be ensured so you can live in your own home for a long time.
Three important points when financing a house or apartment
1. Equity capital: The capital you have contributed must amount to at least 20% of the price of the home. 2. Debt capital: The debt capital (the mortgage) can be up to 80% of the price of the home. 3. Affordability: After the purchase, there are the upkeep costs for your property. You need to be able to afford them in the long term.
Example for financing your own home
If you buy a home worth CHF 1 million, the mortgage can be no more than 80% of the purchase price, i.e. CHF 800 000. The remaining 20% must be financed from your own resources. These include, for example, savings in bank accounts, share assets, early withdrawals from the pension fund, capital from the 3rd pillar, advancements of inheritance and gifts.
Make an appointment for a consultation
Our experts at Swiss Life and Swiss Life Select would be happy to advise you at a location of your choice or online by video.
Which financing options you can take advantage of
To fulfil your dream of owning your own home, you need the right financing mix of equity and debt capital. The following components can be used for financing:
- Using your own account and savings capital
- Early withdrawals from the pension fund or pledging of pension fund capital
- Withdrawing capital from life insurance policies (3rd pillar) or depositing it as collateral
- An advancement of inheritance or a gift
Often, bank balances or safekeeping accounts are not enough to buy a property. Then you can consider additional funds, which also count as equity:
Private provisions in the 3rd pillar
Pillar 3a (tax-qualified provisions)
You can use 3rd pillar capital to finance owner-occupied residential property, to renovate or refurbish your own home, and to amortise an existing mortgage. You can choose to make an advance withdrawal or pledge your pillar 3a assets for your home. Please note, however, that you may only use pillar 3a once every five years for home ownership (WEF). Spouses or registered partners are, however, considered individually in this regulation, as they are entitled to their capital independently of each other.
Pillar 3b (non tax-qualified provisions)
Non-tax-qualified provisions (pillar 3b) are a private pension solution designed to close the gaps between the pension fund annuity and the money required to maintain the person's accustomed lifestyle. You can use pillar 3b as collateral when you take out a mortgage. Pension products in this area include life insurance or investment products.
Pension fund (2nd pillar)
There are two ways you can use your pension fund assets to buy your own home:
Early withdrawal: Your pension certificate shows you how much money you can withdraw from your pension fund. One disadvantage here, however, is that the early withdrawal reduces your retirement capital. In addition, pension funds generally also reduce death and disability benefits. You can offset this withprivate risk protection.
Pledge: If you pledge your pension fund assets or 3rd pillar pension assets, your insurance cover and retirement capital remain unrestricted. Instead, the interest burden increases.
- You can withdraw up to 10% of the lending value from the pension fund.
- If you are over 50, you can withdraw up to half of your current pension plan savings or the exact amount of your pension plan savings when you reach your 50th birthday.
We recommend pledging as this method does not jeopardise your financial security and self-determination in old age.
Advancement of inheritance
Another way for you to raise your equity is through an advancement of inheritance. With such an advancement of inheritance, your parents provide you with a certain amount of money during their lifetime. By law, this amount must be set off against the subsequent inheritance (offset obligation).
What do I have to do for an advancement of inheritance?
- Your parents must state in writing whether and to what extent the advancement of inheritance should be offset.
- The statutory portion of the other heirs must not be affected.
- Transparency prevents disputes: Inform your siblings about the advancement of inheritance and conditions.
- An advancement of inheritance is subject to inheritance tax
- If you receive an advancement of inheritance from your parents, you must offset the amount when dividing the estate, i.e. the gift is deducted from the inheritance. Your parents can also exempt you from this hotchpot duty. In this case, the gift is no longer taken into account in the subsequent division of the estate, as long as the statutory portions of the other heirs are retained.
- You should regulate any advancements of inheritance or gifts in a written agreement and specify whether and to what extent the benefit is subject to hotchpot duty.
- Gifts are subject to inheritance tax
How we help you to find the right financing
We advise you comprehensively on your way to the right financing and support you from the initial planning to your own four walls and beyond. This has many advantages for you:
- We can offer you a customised budget, pension and financial advice to help you realise your dream of owning your own home more quickly.
- We show you how you can accumulate your equity capital in a tax-optimised manner over the long term.
- We take a comprehensive look at your personal situation and tailor a financing concept for you.
- Thanks to the SwissFEX mortgage platform, we can show you a wide range of offers from different providers. Suitable offers are compared transparently and in real time.
- We make it possible for you to access mortgages on preferential terms that you would not otherwise have access to.